Lien on arbitral award and deposits as to costs
Section 39 of the Arbitration and Conciliation Act, 1996 deals with lien on arbitral award and deposits as to costs. Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration. The Act came into force on 22 Aug 1996.
(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.
(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be entitled to appear and be heard on any such application.
(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any question arises respecting such costs and the arbitral award contains no sufficient provision concerning them.
Section 39, The Arbitration and Conciliation Act, 1996 (Act 26 of 1996).
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.
-
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: Lien on award - tribunal has lien for unpaid costs; court can review reasonableness of fees demanded; party can challenge fees unless fixed by written agreement
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 39
What have the courts held on Section 39 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: Lien on award - tribunal has lien for unpaid costs; court can review reasonableness of fees demanded; party can challenge fees unless fixed by written agreement.
How do I find court cases under Section 39 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 39, section 39 Arbitration Act, section 39 of the Arbitration and Conciliation Act. People searching for it also type arbitration act 2025 section 39a and arbitration act 1996 section 39. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Ntpc Limited vs Afcons R. N. Shetty and Co. Pvt. LTD Jv (30 Aug 2022).
When did Section 39 of the Arbitration and Conciliation Act come into force?
Section 39 of the Arbitration and Conciliation Act, cited as Arbitration Act 39, 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 15 Oct 2026. This page is not a substitute for legal advice.