07 Jan 2020

Arbitrator’s Fees reduced from BHD207,500 to BHD60,000

A court-appointed arbitrator proposed BHD207,500 as his arbitration fees.

A court-appointed arbitrator proposed BHD207,500 as his arbitration fees. The proposal was in the draft terms of reference, which was not signed by the respondent. The latter objected throughout the arbitration proceedings on the “exaggerated” arbitration fees. Upon the issuance of the arbitral award in favour of the claimant, the respondent immediately filed a case against the arbitrator before the High Civil Court, requesting a fair determination of the arbitrator’s fees. The court reduced the arbitrator’s proposed fees from BHD207,500 to BHD60,000.

The case reached the Court of Cassation who set the following principles:

–         Since the respondent did not sign the ToR, it shall not be obliged to pay the arbitration fees and furthermore, the arbitrator was not authorised by the parties to determine his fees.

–         The arbitral award enjoys enforceability within its jurisdiction, i.e. the dispute, which does not extend to the determination/estimation of the arbitral fees despite being part of the ruling. Otherwise, the arbitrator will be an opponent and a judge at the same time, which is unacceptable.

–         Since the Bahraini law is silent in respect of estimating the arbitration fees, the only possible way shall be through the competent court, i.e. the High Civil Court.

I believe the arbitrator could have handled his fees in a better way. He rushed into proceedings without signing the ToR. The respondent is willing to arbitrate, which is an imperative foundation for the arbitrator. What do you think? Please share your thoughts.

PS: It was an ad-hoc arbitration.

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