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The Supreme Court has disapproved retired judges charging exorbitant fees in arbitration cases.

A bench comprising Justices R V Raveendran and H L Dattu, while dismissing the appeal of the Centre challenging a Delhi High Court order appointing a retired judge of a High Court as sole arbitrator in a dispute between the Railways and a contractor, noted’ It is necessary to find an urgent solution for this problem...’ Institutional arbitration has provided a solution as the arbitrators fees is not fixed by the arbitrator themselves on a case to case basis but is governed by a uniform rate prescribed by the institution under whose egis the arbitration is held.

Another solution is for the court to fix the fees at the time of appointing arbitrator, with the consent of parties, if necessary in consultation with the arbitrators concerned.

Retired judges could also offer to serve as arbitrators to indicate their fee structure to the Registry of the respective High Court so that the parties will have the choice of selecting a arbitrator, whose fees fall in their range, with regard to the stakes involved.

What is found to be objectionable is parties being forced to go to an arbitrator appointed by the court and then being forced to agree for a fee fixed by such arbitrator, the bench said.

The apex court also disapproved the practice of bureaucrats appointed as arbitrator, being frequently transferred resulted in delaying the arbitration.

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