In the case of Oil and Natural Gas Corporation Ltd. v. Afcons Gunanusa JV[1], the Hon'ble Supreme Court of India, comprising of Justice Dr D.Y. Chandrachud, Surya Kant, and Sanjiv Khanna, JJ, determined the following issues:
In 2009, the Oil and Natural Gas Corporation Limited (Petitioner), and Afcons Gunanusa JV (Respondent) entered into a contract for the construction of an ICP-R Platform which is alleged to have been completed in December 2012. The respondent invoked arbitration in July 2015 due to ongoing disputes and differences between the parties. Justice Gyan Sudha Mishra and Justice Mukul Mudgal were appointed as the arbitrators by the Petitioner and the Respondent respectively. The arbitrators appointed Justice GN Ray as the presiding arbitrator. The arbitral tribunal, vide its orders in August 2016 and May 2018, directed the parties to deposit 25% of the arbitrators’ fee and finalize a fee respectively to the tune of INR 1,50,000/- for each arbitrator for each sitting of a three-hour duration; reading fee or conference fee to be indicated at a later stage. ONGC filed an application before the arbitral tribunal for modifying its order issued in May 2018 and the same was rejected as the tribunal held that the fee was set based on the amount paid in arbitrations of such nature. However, the tribunal agreed to reduce the fee of each arbitrator to INR 1,00,000/- per sitting. Thereafter, ONGC filed a petition under Section 14 read with Section 15 of the Arbitration Act before the Hon’ble Bombay High Court for the termination of the mandate of the arbitral tribunal and the substitution of a fresh set of arbitrators. The said petition was dismissed by the Bombay High Court vide its order in October 2021 due to a lack of jurisdiction since the arbitration was an international commercial arbitration within the meaning of Section 2(f) of the Arbitration Act. Hence, the present petition was filed by ONGC.
The Hon’ble Court, while referring to Union of India v. Singh Builders[2], Mithilesh Kumari v. Prem Behari Khare[3] and LCI 246th Report[4], held that:
[1] 2022 (SC)723
[2] (2009) 4 SCC 523
[3] (1989) 2 SCC 95
[4] Law Commission of India, ‘Amendments to the Arbitration and Conciliation Act 1996’ (246th Report, August 2014) accessed on 08 September 2022 (“LCI 246th Report”)
-Harjodh Singh Panesar, Associate