The Hon’ble Supreme Court on March 24, 2022, in the matter of Oil and Natural Gas Corporation ltd. v. Afcons Gunanusa JV, considered arbitration petition filed by the Oil and Natural Gas Corporation (“ONGC”) on the issue related to the mandatory nature of the model fee scale for arbitrators prescribed under the Fourth Schedule of the Arbitration and Conciliation Act, 1996.

The Apex Court discussed on solutions such as (a) parties indicating to the arbitrator the estimated number of sittings before the commencement of proceedings and fixing the fees; accordingly, (b) allowing the arbitrator to increase the fees beyond the agreed scale to a certain percentage (say 10%) of the sittings exceed the estimate; (c) allowing the arbitrator to approach the Court for increasing fee beyond the allowable percentage; (d) stopping the practice of splitting a day into different hearings and applying Fourth Schedule scale day wise.

While discussing the Court suggested:

“Arbitrator can fix the fees for a given number of sittings with consent of parties & in case parties do not agree for revision of the fees, then they could seek judicial intervention for determination of ‘reasonableness in the increase of the fees’”.