'Young Lawyers Make Arbitrators Of High Integrity, Completes Proceedings In A Short Span At Minimal Costs': Supreme Court

The Supreme Court on Friday remarked that it may be in the interest of alternative dispute resolution if, where feasible, young counsel are appointed as arbitrators, who not only go about the task diligently but are more than willing to operate at minimal costs.

The bench of Justices D. Y. Chandrachud and M. R. Shah was hearing a matter where the parties voiced their grievance over the arbitrator, a former High Court judge, keeping on adjourning and dragging the proceedings but raising the fee at every hearing, burdening both parties with increasingly heavy costs of arbitration.

At this, Justice Chandrachud recalled an episode from his term as a judge of the Bombay High Court-

"I had appointed an arbitrator, saying that he shall be paid in accordance with the schedule in the High Court Rules. One day, the counsel for both the contesting parties came to me and said that there is a matter of serious embarrassment to both parties, the claimant and the respondent- that the arbitrator is insisting that he will fix his own fee and is demanding that he be paid what he is asking! I told them to move an application to change the arbitrator..."

Continuing, the judge narrated how the Bombay High Court has followed the practice of appointing the younger counsel as arbitrators-

"They are people of high integrity and such appointments also provide great training for the future! They sit after hours, they sit in the evenings and the hearing is completed in 1 or 2 hours and the matter is settled in fewer days. It is a no-nonsense procedure- they have enough work! And they say that they don't even want a fee! They say it is a matter of honour for them to be assisting the court and that this honour is enough! In fact, the court insists that it is a professional service so they must be paid, and then the entire proceedings are performed for minimal costs!"

"I had also started appointing young lawyers in the Company jurisdiction in the High Court, where there were small matters of 20-25 lakhs...these are very bright lawyers who do it as a duty to the court", told Justice Chandrachud.

With the consent of the counsel and on the specific instructions of the parties whom they represent, on their request, the bench of Justices Chandrachud and Shah directed that in substitution of the Arbitrator, who was appointed by the order of the Supreme Court dated April 24, 2017, all the disputes and differences between the parties are referred to the sole arbitration of Mr. Justice Naresh H. Patil, former Chief Justice of the High Court of Judicature at Bombay.

"It is good that you have agreed on someone, otherwise this morning, I was going to ask you to get a young lawyer", said Justice Chandrachud.

The bench also passed the following directions:-

(i) The proceedings shall commence from the stage which was reached before the previous Arbitrator and the arbitral award is to be made after hearing final arguments on the basis of the evidence already placed on the record;

(ii) No further evidence would be adduced by either of the parties and in the circumstances, the record before the previous Arbitrator shall be transmitted to the Arbitrator appointed in pursuance of the above directions and shall form the basis of the final submissions and award thereon;

(iii) In view of the stage which has been reached in the arbitral proceedings, the fees of the Arbitrator are fixed at a lump-sum of Rs 15 lakhs;

(iv) The above amount shall be shared between the contesting parties: the respondents shall bear 50% of the aforesaid amount, while the claimants shall between them share the balance 50% in equal proportion;

(v) The previous Arbitrator whose appointment has been substituted by the above direction, shall transmit the records and papers to the learned Arbitrator who has been appointed in pursuance of the above directions; and

(vi) No refund is being claimed of the fees already paid to the previous Arbitrator, and no further amount shall be payable towards fees, costs and expenses.

"In view of the fact that the arbitral proceedings are pending since 2017, the newly appointed Arbitrator is requested to expedite the proceedings and to deliver the arbitral award preferably within a period of four months from the date of receipt of a certified copy of this order. All the parties have agreed to cooperate with the time schedule which has been fixed by the learned Arbitrator without seeking adjournments", the bench ordered.

Case Title: M/s Supreme Cylinders Limited v. Anurag Deepak & Anr.

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