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Gammon Engineers and Contractor Pvt Ltd v. National Highways Authority of India
Gammon Engineers and Contractor Pvt Ltd v. National Highways Authority of India
Facts:
The petitioner (Gammon Engineers and Contractors Pvt. Ltd) and the respondent (NHAI) both on 7 February 2006 entered into a contract. Under this contract, they agreed to settle through arbitration. The arbitration clause under the contract prescribed fees payable to the arbitrators under a policy circular of the Respondent. However, since the Appellant was a government agency thus it issued a Circular where it amended the fee structure payable to the Arbitral Tribunal. The fees prescribed in the circular was relatively higher than the fees fixed in the clause. . A dispute arose between the parties and arbitration was raised by the petitioner. The petitioner notified the arbitration tribunal that the fee application should be considered as per the fees stipulated in the policy circular issued by the appellant. However, the Tribunal stated that the arbitrator fees shall be regulated as per provisions of the Fourth Schedule of the Amendment Act 2015. The Respondent moved an application against this informing the Tribunal that the arbitral fees as stipulated by the parties as per the arbitration clause and thus, it was fixed as per the circular issued and not as per the Fourth Schedule. The Arbitral Tribunal rejected this and held that Arbitral Tribunal is competent to fix the fees despite the agreement between the parties thus maintaining the previous decision.
The Respondent again under Section 14 of the Act moved an application before the Delhi High Court seeking dissolution of the order passed by the Arbitral Tribunal. The Delhi High Court held that the Amendment Act does not take away the earlier position under the Arbitration and Conciliation Act, and the parties are free to decide upon the fees of the arbitrator.
The Court further terminated the order passed by the tribunal on the ground that the arbitral tribunal was bound to respect the arbitration agreement between the parties which provides for a schedule of arbitrator fees. The decision of the Delhi High Court was challenged before the Supreme Court.
Issue:
Whether the Arbitral Tribunal is bound to charge the fees in accordance with the agreement between the parties or the Fourth Schedule of the Amendment Act of 2015?
Judgment
The Supreme Court held that the fees as stipulated by the agreement between the parties which was amended by the Circular issued between the parties which shall be adhered to. It was ruled that Arbitral Tribunal shall be entitled to charge their fees in accordance with the agreement between the parties and not under the Fourth Schedule of the Amendment Act, 2015. The application to remove the arbitrators was found to be insincere. The arbitrators in the present case just followed the law laid down by the Court and thus cannot be said to have done wrong so that their mandate may be terminated. Thus the decision of the Delhi High Court in the present case was set aside. [1]
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.
- Facts
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- Judgment
