Best Arbitrator Fee Calculator (Fourth Schedule) Lawyer

How much will the arbitrator cost? For an ad hoc arbitration in India, the Fourth Schedule to the Arbitration and Conciliation Act, 1996 sets out a model scale of fees by reference to the sum in dispute. Courts use it when appointing arbitrators under Section 11, and parties often use it as a benchmark when agreeing fees. The calculator below applies that scale, including the additional 25% for a sole arbitrator and the ₹30 lakh ceiling per arbitrator explained by the Supreme Court in ONGC v Afcons Gunanusa (2022).

Enter the total sum in dispute, including claims and counter-claims as the tribunal would treat them, and choose a sole arbitrator or a three-member tribunal. The result is the model fee for the whole arbitration. It is an estimate: the parties and arbitrators can agree different fees, institutional arbitrations use their own schedules, and expenses such as venue, stenography and travel are extra.

Use it to budget before starting an arbitration, to test a fee proposal from an arbitrator, or to compare ad hoc with institutional arbitration.

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Estimate the fee

The Fourth Schedule scale

A sole arbitrator is entitled to an additional 25% on the fee payable under this scale.

How to read the result

The Fourth Schedule fee is a fee for the whole arbitration, not per hearing. It is meant to cover the arbitrator's work from the start of the reference to the award. In practice, arbitrators and parties often agree to pay it in instalments, for example a part at the preliminary meeting, a part after pleadings, a part after evidence and the balance on delivery of the award, with deposits shared equally.

The model fee is calculated on the "sum in dispute". Where there are claims and counter-claims, practice varies on whether they are added together or fees are calculated on each separately; ONGC v Afcons (2022) indicated that claims and counter-claims should be treated separately for fee purposes. Where a claim is not for money, such as a claim for specific performance or declarations, the parties or the court will need to fix a value or agree a fee on another basis.

When the Fourth Schedule applies

Section 11(14) of the Arbitration Act, added in 2015, allowed High Courts to frame rules for determining arbitrators' fees, taking into account the rates in the Fourth Schedule. The Explanation to Section 11(14) says the subsection does not apply to international commercial arbitrations and to arbitrations, other than international commercial arbitrations, where the parties have agreed for determination of fees under the rules of an arbitral institution.

In ONGC v Afcons Gunanusa (2022), the Supreme Court held that arbitrators cannot unilaterally fix their own fees; fees must be agreed between the parties and the arbitrator, and where they are not, the Fourth Schedule or applicable rules apply. It also explained that the ₹30 lakh ceiling applies to each arbitrator individually, and that the ceiling relates to the sum of the base and variable amounts. So, for an ad hoc domestic arbitration where fees are not agreed, the Fourth Schedule is the benchmark.

Worked examples

Other costs of an arbitration

Arbitrator fees are only one part of the cost. A realistic budget also includes the venue (unless hearings are online or in an office), secretarial assistance to the tribunal, stenography or transcription, travel and accommodation for the tribunal and witnesses, expert witnesses' fees, the parties' own legal fees, and stamp duty on the award where applicable. In smaller cases, legal fees and expenses can exceed the arbitrator's fees.

At the end of the arbitration, the tribunal decides who bears the costs under Section 31A, generally following the principle that the unsuccessful party pays the successful party's reasonable costs, subject to conduct and partial success. Keep records of all costs from the start, so that a costs claim can be supported.

Ad hoc or institutional?

Institutional arbitrations, such as under DIAC, IIAC, MCIA, ICA, SIAC or ICC, have their own published fee schedules, which include administrative fees in addition to arbitrators' fees. For some amounts, institutional fees may be higher than the Fourth Schedule; for others, comparable. Institutions also provide administrative services, appointment of arbitrators if the parties disagree, and fee control, which avoid some disputes and court applications.

Compare the total likely cost, not just the arbitrator's fee, and consider the value of institutional support. For small claims, online arbitration with a sole arbitrator on a fixed fee may be the most economical option. See online arbitration and DIAC arbitration.

Laws that apply

How we work

We are a litigation and advisory practice led by Advocate BK Singh, with offices in Dwarka (New Delhi) and Vaishali (Ghaziabad). This is what you can expect:

• Budget upfront: arbitrator and legal costs estimated before you start.
• Proportionate procedure: sole arbitrators and online hearings where suitable.
• Fee agreements: clear written terms with arbitrators.
• Costs recovery: records kept for a costs claim at the end.
• Written fee terms: agreed stage by stage, never linked to the outcome.

Points to remember

Agreeing fees with the arbitrator

The most common source of friction between parties and arbitrators is fees left open at the start. Before the first hearing, agree in writing the basis of the fee (a lump sum for the whole reference, a percentage under the Fourth Schedule, or a fee per sitting), the schedule of payment, how deposits will be shared, what expenses are covered, and what happens to fees if the case settles or is withdrawn early. Many arbitrators send a fee proposal at the preliminary meeting; parties can accept it, negotiate it, or propose the Fourth Schedule.

Where one party does not pay its share, the other may pay to keep the arbitration going, and recover the amount in the award. Section 38 allows the tribunal to fix deposits and to suspend or terminate the proceedings if they are not paid, so non-payment by a respondent should not stop a claimant's case if the claimant pays.

Per-sitting fees and why they cause problems

In some ad hoc arbitrations, arbitrators charge a fee for each sitting or hearing. This can be fair in short cases, but in longer ones it creates an incentive for more and shorter hearings, and makes the total cost unpredictable. Courts and commentators have criticised the practice in cases where arbitrations ran for years with many brief hearings. A lump-sum fee, or the Fourth Schedule fee paid in stages, gives both sides certainty.

If a per-sitting fee is agreed, also agree a cap on the total, or a fixed number of sittings for each stage, and a clear definition of what a sitting is. Combined with a firm procedural timetable, this keeps costs under control.

Fees when the claim value changes

If the claimant amends its claim to increase the amount, or the respondent files a large counter-claim, the sum in dispute changes, and so may the fee. ONGC v Afcons (2022) indicated that claims and counter-claims should be treated separately for fee purposes, each with its own calculation under the Schedule, subject to the ceiling. Where the fee was agreed as a lump sum, the agreement should say whether it covers later changes in value.

When budgeting, consider the likely counter-claim. A respondent facing a claim may file a counter-claim of similar or larger value, which can double the arbitrator's fee.

Recovering arbitration costs

Under Section 31A, added in 2015, the tribunal has discretion to decide whether costs are payable by one party to another, the amount, and when they are to be paid. The general rule is that the unsuccessful party pays the costs of the successful party, though the tribunal can make a different order for reasons recorded in writing. Costs include the fees and expenses of the arbitrators, courts and witnesses, legal fees and expenses, administration fees of an institution, and other expenses incurred in connection with the proceedings.

In deciding costs, the tribunal considers the conduct of the parties, whether a party succeeded partly, whether a party made a frivolous counter-claim or caused delay, and whether a reasonable settlement offer was refused. Keep records of all fees paid, and submit a statement of costs with supporting documents when the tribunal asks.

Court-appointed arbitrators and fees

When a High Court or the Supreme Court appoints an arbitrator under Section 11, the order often fixes the fee, by reference to the Fourth Schedule or the court's own rules, or leaves it to be agreed with the parties. The Delhi High Court, for example, has rules and practice directions on fees for arbitrators it appoints, and it often refers appointments to DIAC, in which case DIAC's fee schedule applies.

Check the appointment order for the fee terms. If the order is silent, propose the Fourth Schedule to the arbitrator at the first meeting, and record the agreement in the minutes.

Reducing the cost of arbitration

Arbitration need not be expensive. Choose a sole arbitrator for disputes below a few crore rupees. Consider fast-track arbitration under Section 29B, where the case is decided on documents within six months. Use online hearings for case management and arguments. Limit document production to what is really needed. Use written witness statements and limit cross-examination time. Ask the tribunal to decide preliminary issues, such as limitation, early. And consider mediation at the start or during the case, which can resolve the dispute at a fraction of the cost. See fast-track arbitration.

Fees in MSME council arbitrations

Where a micro or small enterprise refers a delayed payment dispute to an MSME Facilitation Council under Section 18 of the MSMED Act, the council itself acts as the arbitral tribunal, or refers the dispute to an institution. Council proceedings usually involve little or no fee for the parties, which makes them far cheaper than ad hoc arbitration for suppliers. The Fourth Schedule does not apply in the same way to council arbitrations, though institutions to which councils refer cases have their own fees.

For an eligible supplier with an unpaid claim, the council route can save the arbitrator's fees altogether, in addition to giving the benefit of statutory interest. See MSME delayed payment.

Emergency and interim applications

Applications for interim relief to the tribunal under Section 17 are usually covered by the arbitrator's overall fee, though some arbitrators charge separately for urgent hearings outside the timetable. Court applications under Section 9 involve court fees and legal fees, not arbitrator fees. Institutional emergency arbitrator procedures have their own fees, payable by the applicant. Budget for interim applications separately if they are likely, for example in disputes involving bank guarantees or assets at risk.

Getting a realistic estimate

For a full budget, tell us the amount claimed and any likely counter-claim, the number of witnesses on each side, whether expert evidence will be needed, whether hearings can be online, and whether interim applications are likely. We can then estimate the arbitrator's fees, the institution's fees if any, the legal fees for each stage, and the main expenses, so that you can decide whether and how to proceed.