Regime for costs
Section 31A of the Arbitration and Conciliation Act, 1996 deals with regime for costs. In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), shall have the discretion to determine-- (a) whether c The Act came into force on 22 Aug 1996.
1[31A. Regime for costs.-- (1) In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), shall have the discretion to determine--
(a) whether costs are payable by one party to another;
(b) the amount of such costs; and
(c) when such costs are to be paid.
Explanation.--For the purpose of this sub-section, "costs" means reasonable costs relating to--
(i) the fees and expenses of the arbitrators, Courts and witnesses;
(ii) legal fees and expenses;
(iii) any administration fees of the institution supervising the arbitration; and
(iv) any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.
(2) If the Court or arbitral tribunal decides to make an order as to payment of costs,
(a) the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party; or
(b) the Court or arbitral tribunal may make a different order for reasons to be recorded in writing.
(3) In determining the costs, the Court or arbitral tribunal shall have regard to all the circumstances, including--
(a) the conduct of all the parties;
(b) whether a party has succeeded partly in the case;
(c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the arbitral proceedings; and
(d) whether any reasonable offer to settle the dispute is made by a party and refused by the other party.
(4) The Court or arbitral tribunal may make any order under this section including the order that a party shall pay--
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f ) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date.
(5) An agreement which has the effect that a party is to pay the whole or part of the costs of the arbitration in any event shall be only valid if such agreement is made after the dispute in question has arisen.]
Section 31A, The Arbitration and Conciliation Act, 1996 (Act 26 of 1996).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Ntpc Limited vs Afcons R. N. Shetty and Co. Pvt. LTD Jv
Court's Decision & Legal Precedent
Arbitrators do not have unilateral power to determine their own fees. Where parties have fixed fees by agreement or court has fixed fees by order, arbitrators are bound by such fees. Where no agreement or court order exists, arbitrators may fix reasonable fees only after transparent consultation with parties at preliminary stage, and such fees are subject to court review for reasonableness under Section 39. The Fourth Schedule is binding on ad hoc arbitrations post-Amendment Act 2019. The term 'sum in dispute' in Fourth Schedule refers to aggregate of claim and counter-claim. The ceiling of Rs. 30 lakhs in Serial No. 6 applies to total fee, not just variable component. The fee is per individual arbitrator, not per tribunal. Arbitrators cannot charge separate fees for claims and counter-claims; they must charge single fee based on aggregate sum in dispute.
On this section: Regime for costs - tribunal has discretion to determine whether costs payable, amount, and timing; explanation defines costs to include arbitrators' fees
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National Highway Authority of India General Manager (tech) Rananjay Singh vs Gayatri Jhansi Raodways Limited Authorized Signatory
Court's Decision & Legal Precedent
When parties have agreed upon a specific fee structure for arbitrators in their contract, such contractually agreed fees will govern the arbitration, and the Fourth Schedule of the Arbitration and Conciliation Act, 1996 (as amended in 2015) is not mandatory. The deletion of 'unless otherwise agreed by the parties' from Section 31A relates only to 'costs' awarded as part of the arbitral award and does not override contractual fee agreements. Arbitrators do not become de jure unable to perform their functions by following statutory law, and an application under Section 14 to terminate their mandate cannot succeed merely on the ground that they initially followed a statutory interpretation regarding fees.
On this section: Deals with costs generally; deletion of 'unless otherwise agreed by the parties' signifies parties cannot contract out of payment of costs, but does not directly govern arbitrator fees when a fee structure is already contractually agreed
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 31A
What have the courts held on Section 31A of the Arbitration and Conciliation Act?
Ntpc Limited vs Afcons R. N. Shetty and Co. Pvt. LTD Jv (30 Aug 2022) is the leading judgment on this section among those set out below: Regime for costs - tribunal has discretion to determine whether costs payable, amount, and timing; explanation defines costs to include arbitrators' fees. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2019 to 2022.
How do I find court cases under Section 31A of the Arbitration and Conciliation Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Arbitration Act 31A, section 31A Arbitration Act, section 31A of the Arbitration and Conciliation Act. People searching for it also type 31a arbitration act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Ntpc Limited vs Afcons R. N. Shetty and Co. Pvt. LTD Jv (30 Aug 2022).
What should I read with Section 31A of the Arbitration and Conciliation Act, and has it changed?
1 other provision in this corpus refers back to it.
When did Section 31A of the Arbitration and Conciliation Act come into force?
Section 31A of the Arbitration and Conciliation Act, cited as Arbitration Act 31A, came into force on 22 Aug 1996, having been enacted on 16 Aug 1996. It is in force as at the date shown on this page.
Other sections of this Act
- 8. Power to refer parties to arbitration where there is an arbitration agreement1029 words
- 11. Appointment of arbitrators1027 words
- 34. Application for setting aside arbitral awards861 words
- 2. Definitions732 words
- 29A. Time limit for arbitral award635 words
- 57. Conditions for enforcement of foreign awards519 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.