When Does the Delhi High Court Fix Arbitrator Fees Under the Fourth Schedule?

When does the Delhi High Court fix Fourth Schedule arbitrator fees? The short answer

The Fourth Schedule to the Arbitration and Conciliation Act, 1996 (the Act) is a model fee scale tied to the sum in dispute. Section 11(14) lets High Courts frame rules on arbitrators' fees after taking those rates into account. In practice the Delhi High Court applies the Schedule in three main situations. First, when it appoints an arbitrator under Section 11 and says in the order that fees will follow the Fourth Schedule. Second, when a party asks it to step in on fees later, most often under Section 39(2) because the arbitrator is holding back the award until paid. Third, when fees come up while it's extending time under Section 29A, or replacing an arbitrator who has withdrawn.

Plenty of Delhi High Court appointment orders don't mention the Fourth Schedule at all. They appoint someone from the DIAC panel and say the arbitrator is entitled to fees under the DIAC fee rules. One recent example is General Manager, Northern Railway v. Lachhi Ram and Sons (ARB.P. 1642/2026, order dated 12 October 2026). The court appointed a sole arbitrator and said fees would be in accordance with the DIAC Rules, 2018. So which scale applies to you depends, before anything else, on the words of your own order.

Two more limits. The Fourth Schedule doesn't apply to international commercial arbitrations, or where the parties agreed fees would follow an institution's rules. The Explanation to Section 11(14) says so in terms. And after the Supreme Court's judgment in ONGC v. Afcons Gunanusa JV (2022), it isn't compulsory even in domestic ad hoc cases. What the parties agree wins. An arbitrator can't fix fees alone.

The provisions that actually decide what the arbitrator is paid

The Fourth Schedule arbitrator fees table

Working out the fee: sole arbitrator, three arbitrators, and the ceiling

Take the sum in dispute. Find its band. Apply the formula. The bands meet cleanly at the edges. Rs 45,000 plus 3.5 percent of Rs 15 lakh comes to Rs 97,500 at the Rs 20 lakh mark, which is exactly where the next band starts, and the same holds all the way up, so nothing jumps at a boundary. The percentage drops as the amount climbs. That's intended. A dispute ten times bigger doesn't get a fee ten times bigger.

Arbitrators and High Courts had been split on three points until the Supreme Court decided ONGC v. Afcons Gunanusa JV on 30 August 2022. One: the Rs 30 lakh ceiling covers the whole fee, base amount and percentage together, not just the percentage part. Two: the ceiling is per arbitrator, not per tribunal. A three-member tribunal can get up to Rs 30 lakh each. Three: a sole arbitrator's 25 percent sits on top of the ceiling. So the most a sole arbitrator can get under the Schedule is Rs 37.5 lakh.

You hit the ceiling once the sum in dispute is a little over Rs 40 crore. Below that, the formula sets the fee. Above it, the fee stays at Rs 30 lakh per arbitrator however big the claim gets. On large infrastructure disputes that's a good deal less than senior arbitrators often charge in ad hoc matters. Which is why these fights keep landing in court.

Are the claim and counter claim added together?

Not under the Fourth Schedule. Afcons held that in ad hoc arbitration you calculate the 'sum in dispute' separately for the claim and the counter claim, since they're independent proceedings, and work out a fee on each. The scale is regressive. So two separate calculations usually give a bigger total than one calculation on the combined figure. Each calculation has its own ceiling, too.

The Delhi High Court applied this in Ahluwalia Contracts (India) Ltd v. Union of India (24 July 2024). The sole arbitrator had worked out his fee using an earlier Delhi High Court decision, one the Supreme Court disapproved in Afcons. His reasoning was that he'd been appointed before Afcons came out. The court didn't accept that. It recomputed the fee under the Fourth Schedule, claim and counter claim taken separately. It told the arbitrator to refund what one party had overpaid, told the other party to make up its shortfall, and directed the award to be published within a week of that payment. The application had come under Section 39(2).

DIAC does it differently. Rule 3(ii) of the DIAC (Administrative Costs and Arbitrators' Fees) Rules, 2018 assesses fees on the claim and counter claim added together. A proviso allows separate assessment if one party won't pay its share. That means the same dispute can carry a different fee depending on whether the appointment order says 'Fourth Schedule' or 'DIAC rules'. The DIAC scale is explained in our guide on DIAC arbitration fees.

Is the Fourth Schedule binding? Party autonomy after Afcons

No. Afcons held the Fourth Schedule is a model, not a mandate. If the parties agreed a fee, in the contract or after the dispute began, that agreement governs. If the appointing court fixed the fee, its order governs. The Schedule fills the gap where neither has happened and the court has directed it.

The same judgment said an arbitrator can't fix his own fee on his own and hold the parties to it. Fees are agreed between the parties and the tribunal. For ad hoc arbitrations, the Supreme Court set out a process. The tribunal should hold preliminary hearings, up to four of them, to settle terms of reference that cover the fee and its heads. An arbitrator appointed under the agreement who finds the agreed fee unacceptable should say so then; if the parties won't agree, he may decline the appointment. Once the terms are fixed, nobody changes the fee alone. The terms can allow a revision after a set number of sittings, as long as the revised amount is stated.

What matters in real life is timing. A fee agreed at the first or second hearing is binding and you can plan around it. Leave it vague and it turns into a fight just as the award is ready, which is exactly when you've got the least room to argue. When an appointment order comes to Advocate B.K. Singh, he asks the arbitrator at the first hearing to record three things in a written order both sides sign off on: the fee basis, the deposit schedule, and how the counter claim is treated. Ten minutes at the first sitting. It saves a Section 39 application at the end.

When the Fourth Schedule does not apply

International commercial arbitrations are outside it. In NHAI v. Ssangyong Engineering and Construction (28 March 2025), the Delhi High Court threw out NHAI's writ petition asking for the tribunal's fee to be capped at Rs 30 lakh per arbitrator under the Fourth Schedule. Because of the Explanation to Section 11(14), the court said, the Schedule doesn't apply mandatorily in an international commercial arbitration. The tribunal had disclosed its fee, Rs 3 lakh per arbitrator per sitting, at the second sitting. The petitioner hadn't objected for a long time. On those facts, the court held, the Afcons point about unilateral fixing didn't help either.

Institutional arbitrations run on an institution's fee rules are outside it too. At DIAC, the DIAC fee rules apply. And a lot of Delhi High Court Section 11 orders send parties to DIAC, or direct DIAC rates even where DIAC isn't running the case. Our guide on Section 11 references to DIAC shows how those orders are worded.

The third group is contracts that fix fees themselves. Standard government and PSU forms, like those used by the railways, highway authorities and public sector companies, often carry their own fee clause, usually a per-sitting fee with caps. Afcons backed party autonomy. So that clause governs, provided it's valid and the arbitrator accepts on those terms. Some of these clauses are decades old and the rates are frankly unrealistic. Arbitrators may then decline, and the parties have to agree fresh terms or go back to court.

Where arbitrator fee questions reach the Delhi High Court: time and cost

Section 39(2): what if the arbitrator holds back the award for fees?

Section 39(1) gives the tribunal a lien on the award for unpaid costs. Fair enough. An arbitrator who hasn't been paid deserves some protection. The trouble starts when the fee demanded is above the agreed or applicable scale and the award is sitting there, finished, but withheld. Section 39(2) is the way out. You apply to the court and deposit the demanded amount into court, and the court orders the award delivered. It then decides what fee is reasonable, pays that to the tribunal and gives the rest back.

Two conditions matter. First, Section 39(3) bars a party that agreed the disputed fee in writing with the tribunal; the remedy exists for fees nobody agreed, or fees demanded beyond what was agreed. Second, the deposit is real money. If you can't deposit the whole demand, you may have to negotiate with the tribunal or the other side. In practice, Delhi courts sometimes sort it out with all three consenting.

Ahluwalia Contracts shows what the court can do on one of these applications. It recomputed the fee on the right basis. It ordered refunds and shortfalls between the parties. It set a short deadline for the award. So if your arbitrator says the award is ready but wants a fresh deposit worked out on a basis you dispute, write to the tribunal first. Set out the Fourth Schedule calculation and the authority. Keep the Section 39(2) route ready.

Section 29A extensions: can the court cut the arbitrator's fee for delay?

Yes. In a domestic arbitration, Section 29A makes the award due within 12 months of completion of pleadings, and the parties can consent to six months more. After that only the court can extend the mandate. Under the proviso to Section 29A(4), if the court finds the delay was the tribunal's doing, it can reduce the arbitrators' fees by up to five percent for each month of delay. Section 29A(2) runs the other way. If the award comes within six months of the tribunal entering on the reference, the arbitrators can get such additional fees as the parties agree.

Clients are often reluctant to raise delay when they still need the same arbitrator to finish the case. Understandable. But the petition doesn't have to be aggressive. Ask for the extension. Lay out the timeline from the order sheets. Let the court decide whether the delay was the tribunal's or the parties'. Courts look at who asked for which adjournment, not just at the calendar. How the clock runs, and how extension petitions are filed in Delhi, is in our guide on the DIAC arbitration time limit.

If the arbitrator resigns or the mandate ends: who pays for work already done?

When an arbitrator pulls out midway, the parties have usually deposited part of the fee already. The question is how much the arbitrator keeps for work done and how much comes back. If the fee terms cover early termination, they govern. If not, the parties can agree. Failing that, the court can decide when it substitutes the arbitrator under Section 15 or deals with termination of the mandate under Section 14.

Take Manju Gupta v. Vilas Gupta (Delhi High Court, 5 February 2024). The court had earlier directed fees under the Fourth Schedule. The arbitrator resigned after roughly twelve hearings and a few substantive orders, before any issues were framed. With the parties' consent, the court fixed his fee at Rs 7.5 lakh plus Rs 1 lakh towards administrative expenses, and directed the balance of the deposit to be refunded to the two sides equally. For reference points it used the Schedule's Rs 30 lakh maximum and DIAC's stage-wise release scheme. That's typical of how courts apportion. You pay for the stage reached, not the whole fee.

The procedure for a replacement, and what it does to the timeline, is in our guide on what happens when an arbitrator resigns or dies during a DIAC case.

How to deal with a fee demand from a court-appointed arbitrator, step by step

Got a fee demand in an ad hoc or court-appointed arbitration that doesn't look right? Work through these in order.

1. Read the appointment order and the contract

   Find the exact words on fees. Fourth Schedule, DIAC rules, a contract rate, or silence? Also check whether the arbitration is international. If it is, the Fourth Schedule doesn't apply mandatorily.

2. Do the sum yourself

   Apply the right scale to the claim. Under the Fourth Schedule, do the counter claim as a separate calculation. Add 25 percent for a sole arbitrator and cap each arbitrator at Rs 30 lakh. Write it all down.

3. Put it next to the demand

   Gaps usually come from a handful of places: adding claim and counter claim together, counting interest as a separate sum, applying the ceiling to the variable part only, or charging per-sitting fees that nobody agreed.

4. Raise it at the next hearing, on paper

   File a short note with your calculation and the authorities, Afcons among them, and ask the tribunal to record the fee basis in an order. Stay factual. Most fee differences end right here.

5. Pay the part nobody disputes

   Pay your share of the undisputed amount on time. The case keeps moving, and nobody can call you uncooperative. Keep the receipts.

6. Go to court only if you have to

   If the tribunal withholds the award, look at Section 39(2). If the mandate has expired, raise fees in the Section 29A petition. If the arbitrator has withdrawn, raise refunds in the substitution proceedings.

When a fee demand lands on Advocate B.K. Singh's desk, he redoes it from the Fourth Schedule table, claim and counter claim kept apart, before anyone writes to the tribunal. Usually the gap traces back to one of the common errors listed above. A polite note with the working attached tends to settle it without any court application.

Documents to gather for an arbitrator fee question

• The Section 11 appointment order, or the contract clause the arbitrator was appointed under
• The arbitrator's Section 12 disclosure, and any acceptance letter that mentions fee terms
• Order sheets from the first and later preliminary hearings, with the terms of reference if there are any
• The statement of claim and the counter claim, so you can see the amounts and how interest has been put
• Every fee demand and deposit direction the tribunal has sent
• Receipts for each deposit your side made, plus whatever you know about what the other side has paid
• Your own working under the Fourth Schedule, or whichever scale applies
• Emails and letters with the tribunal and the other side about fees
• If the mandate has run out or the arbitrator has left, the dates pleadings closed, of the last hearing and of the withdrawal

Mistakes parties make with arbitrator fees in Delhi

• Skipping the fee line in the order. 'Fourth Schedule' and 'DIAC rules' give different numbers for the same dispute. Find out which one you're under before the first deposit.
• Leaving the fee open at the first hearing. Afcons expects fee terms to be fixed at the preliminary stage. Ask for them to go on record.
• Signing off on a fee you think is too high. Agree it in writing and Section 39(3) closes the door on a Section 39(2) application later. Negotiate before you sign, not after.
• Adding the counter claim to the claim. The Fourth Schedule treats them separately.
• Thinking the Schedule caps fees in an international case. It doesn't apply mandatorily there. The Delhi High Court confirmed that in 2025.
• Holding back your share as a protest. The tribunal can suspend or end the proceedings for non-payment. The other side can also pay your share and claim it back in costs. Pay what's undisputed and fight the rest in writing.
• Leaving fees out of the Section 29A petition. If the tribunal caused the delay, the court can reduce the fee. Someone has to ask.

What to do this week

Dig out the order or clause that appointed your arbitrator and underline what it says about fees. Redo the fee on that basis, with claim and counter claim kept separate if the Fourth Schedule applies. No recorded fee agreement yet? Draft a short note for the next hearing asking the tribunal to fix the fee terms in an order. And if a demand has already come in that you think is wrong, write to the tribunal with your working before the next deposit falls due.

For wider help with a DIAC or court-appointed arbitration, our DIAC arbitration lawyer page explains how the firm handles cases from appointment to award. Our guide on DIAC versus ad hoc arbitration sets the published DIAC scale against negotiated ad hoc fees. For fee questions in arbitrations outside Delhi, our network site arbitrationlawyer.in covers the general law.

If you'd like a fee demand or deposit direction checked against the Fourth Schedule before you pay, or want to hear when the law on arbitrator fees changes, send your papers to Advocate B.K. Singh's team through the contact page.