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CS Professional · Arbitration, Mediation and Conciliation · Preparation and Execution of Arbitral Award

Sen Infra Ltd and Rao Builders arbitrated before a sole arbitrator. The arbitration agreement is silent on fees. After the award is ready, the arbitrator says he will not hand it over until his unpaid costs are cleared. Which statement reflects the position under Section 39(1)?

The tribunal has a lien on the arbitral award for unpaid costs of the arbitration. This is subject to the court's power under sub-section (2) and any contrary provision in the arbitration agreement. Since the agreement is silent, the arbitrator may withhold the award until costs are paid.

  1. AThe arbitral tribunal has a lien on the award for unpaid costs, subject to any contrary provision in the arbitration agreementCorrect
  2. BThe tribunal has no lien and must deliver the signed copy to each party immediately
  3. CThe lien arises only if the High Court first grants permission
  4. DThe lien extends to the parties' other property until costs are paid

Explanation

Section 39(1) gives the tribunal a lien on the arbitral award for any unpaid costs, subject to sub-section (2) and to any contrary provision in the arbitration agreement. Here the agreement is silent, so the lien applies. No court permission is needed for the lien, and it attaches to the award, not to other property.

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