# In the matter of EDAC Engineering Ltd. vs. Industrial Fans (India) Pvt. Ltd. & Ors.

> HC judgment dated 2023-08-31. Citation: TCN-2023-HC-00038. M/s EDAC Engineering Ltd. filed applications (Nos. 2080 and 4609 of 2021) in the High Court of…

- **Court:** HC
- **Order date:** 31 Aug 2023
- **Citation:** TCN-2023-HC-00038
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/edac-engineering-ltd-vs-industrial-fans-133ef8bc

## Summary

### Background

M/s EDAC Engineering Ltd. filed applications (Nos. 2080 and 4609 of 2021) in the High Court of Judicature at Madras against M/s Industrial Fans (India) Pvt. Ltd. and Hon'ble Mr. Justice F.M. Ibrahim Kalifulla, a former Judge of the Supreme Court of India, who acted as the sole arbitrator. The applications sought the release of a lien on an arbitral award and the revision of arbitrator's fees. The applicant argued that the arbitrator had demanded exorbitant fees and wrongfully exercised a lien on the award. The applicant also claimed that due to ongoing CIRP proceedings before the NCLT, they were unable to pay the arbitrator's fees. The arbitrator contended that the fees were fixed based on a mutual agreement between the parties, recorded in the minutes of the arbitral

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## Facts

M/s EDAC Engineering Ltd. (the applicant) was involved in an arbitration with M/s Industrial Fans (India) Pvt. Ltd. (the first respondent). Hon'ble Mr. Justice F.M. Ibrahim Kalifulla (the second respondent) was appointed as the sole arbitrator. The arbitrator passed an arbitral award dated 30.04.2021. The applicant failed to pay the balance arbitrator's fees amounting to Rs.59,73,750/-. The arbitrator exercised a statutory lien on the arbitral award under Section 39(1) of the Arbitration and Conciliation Act, 1996. The applicant filed applications (Nos. 2080 and 4609 of 2021) seeking the release of the lien and the revision of arbitrator's fees. The applicant argued that the arbitrator had demanded exorbitant fees and that they were facing CIRP proceedings before the

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## Issues and analysis

### Issue 1: Whether the Arbitral Tribunal can …

**Ratio:** An Arbitrator cannot determine his fees without consulting the parties, upholding the

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**Reasoning:** The Hon'ble Supreme Court has held that an Arbitrator cannot determine his fees without

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**Interpretation:** This clarifies that while arbitrators cannot unilaterally decide their fees,

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**Application:** In this case, the court found that the parties had agreed to the arbitrator's

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## Parties

- **Judges:** ABDUL QUD…
- **Appellants:** M/s.EDAC Engineeri…
- **Respondents:** M/s.Industrial…
- **Other parties:** Kohi…

## Timeline

- **2018-03-20 — Appointment of…**: The Court appointed the second respondent, a Former Judge of the Hon'ble Supreme Court,…
- **2021-04-30 — Arbitral…**: The Arbitrator passed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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