What is Fourth Schedule of Arbitration and Conciliation Act

Fourth Schedule of Arbitration and Conciliation Act

[The Fourth Schedule]

[See section 11 (3A)]

Note. - In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five per cent. on the fee payable as per the table set out above.

Scope of Fourth Schedule of Arbitration and Conciliation Act

The Arbitration and Conciliation (Amendment) Act, 2015 (‘2015 Amendment Act’), alongside the various normative changes it ushered in, also sought to put in place a standardized benchmark for the determination of the fee payable to an arbitral tribunal.

The resultant Schedule IV (‘Fourth Schedule’) contains a methodology, premised on the quantum of the amount in dispute, to calculate the fee payable to an arbitral tribunal.

The High Court of Delhi in Paschimanchal Vidyut Vitran Nigam Ltd. v. IL&FS Engineering & Construction Company Ltd. held that the Fourth Schedule is not mandatory in its application, and is merely suggestive.

Thus, the arbitral tribunal is not bound to fix its fee in accordance with the Fourth Schedule, unless the parties specifically agree to the applicability of the said Schedule or if the competent Court while appointing an arbitral tribunal in exercise of powers under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’) specifically so directs or there are extant Rules notified by the concerned High Court specifically incorporating the Fourth Schedule.