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The Chief Justice of India Justice NV Ramana today while hearing a matter pertaining to dispute in arbitrator’s fees in an arbitration where ONGC is a party, remarked, “We may have to stop arbitration in India.”

When the matter was called for hearing, Attorney General (AG) of India KK Venugopal, argued that the arbitrators are charging Rs.80 lakhs per arbitration in addition to a separate reading fees.

He said “We want the fourth schedule arbitration set up in the Act. It needs to be uniform.”

The CJI opined that the country may have to stop arbitrations, the AG agreed to it.

Dr. Abhishek Manu Singhvi, however, questioned, “Rs. 30 lakhs is the cap for arbitrators in arbitration under fourth schedule, do you want retired Supreme Court judges to hold arbitration at Rs.30,000 per sitting?”

Singhvi further pointed out that Kevin Setalvad who appeared for ONGC had informed the tribunal that he will take 70-90 sittings and that 50 sittings are already over.

He said, that for 2 years they had objected to a sitting on account of Covid-19.

On hearing the submissions of the parties, CJI Ramana opined that a separate bench would be constituted to resolve this issue.

The Court issued notice in the matter and adjourned it to March 23 without granting any stay on the arbitral proceedings.

In December the CJI had grilled Oil and Natural Gas Corporation (ONGC) as an arbitral tribunal consisting of Retired Justice Dharmadhikari had recused from the proceedings for the PSU refused to agree on the fee schedule for arbitrators.

When the matter was called for hearing, CJI informed the counsel appearing for ONGC that he was going to issue suo motu contempt and that this attitude was unacceptable, however, the counsel was asked by the bench, also consisting of Justices Bopanna and Hima Kohli to have the Attorney General for India KK Venugopal appear in the matter.

The Court informed the AG that it wanted to bring "ONGC's arrogance" to his notice. 

The CJI then read out the letter addressed to the Court by Justice Dharmadikari in which the former Justice said that, “Bearing in mind the reluctance of ONGC in agreeing with the fee schedule, I feel embarrassed to continue as the presiding arbitrator in this matter.”

Questioning ONGC's "attitude", the Court warned that it would proceed to issue contempt in this matter.

He further informed the AG that ONGC seems to have no respect for judges, has been filing frivolous cases, and often behaves very arrogantly.

With this attitude, no judge will act as their arbitrator given their attitude, the CJI added.

The AG assured the bench of taking up the matter with ONGC.

The matter has been adjourned by a week.

The Supreme Court had in January appointed Justices Justice Jai Narayan Patel, former Chief Justice of Calcutta High Court and Hon’ble Mr. Justice Shivax Jal Vazifdar, former Chief Justice of Punjab and Haryana High Court to the panel of arbitrators for the dispute and had directed them to appoint a 3rd arbitrator.

Cause Title: ONGC vs Afcons