Judgment :- Three former Judges of this Court, who were appointed as Arbitrators, have filed the above Writ Petition to issue a Writ of Mandamus, directing the first respondent to pay balance of fees due to each of the three Arbitrators which works out Rs.3,20,000/- each as per the directions in the award dated 14-10-2000. 2. The case of the petitioners is briefly stated hereunder: The first respondent herein is a Government of India undertaking incorporated under the Companies Act. It is engaged in exploration and exploitation of Oil and Natural Gas in various places in India. For the purpose of drilling of oil wells in the sea beds and river beds, it needed some cement additives. It published a notice inviting tender from International competitive bidders for the supply of 4 types of cement additives in sealed covers to be submitted before 7-4-1995. The second respondent along with other tenderers, submitted its Tender on 3-4-1995 along with agency agreement with M/s. Black Gold Consultants and Engineers (P) Limited, Mumbai. After considering the various Tenderers received, the first respondent decided to place the supply order on the 2nd respondent and consequently issued the supply order on 4-8-95 for the supply of specified quantities in each type of cement additives. The second respondent accepted the said supply order on 5-8-95 and submitted its performance bond to the value of US $ 26,300/-. The first respondent opened a Letter of Credit originally till 2-12-95, being the agreed date of supply and later extended till 1-3-1996 and the 2nd respondent supplied the materials after a delay of more than 5 months. The goods were shipped by the supplier only on 28-2-1996 and goods arrived at Mumbai Port on 10-4-1996. Thereafter, the materials were sent to various project centres and tested in the respective Regional Chemical Laboratories. It was found that the additives supplied was of sub-standard quality and the desired parameters of cement slurry could not be achieved with cement additives supplied by the 2nd respondent. This resulted ultimately in the rejection of the materials supplied. Thus, the disputes arose between the parties to the contract and the first respondent invoked the arbitration clause in the contract for settling those disputes. 3. This resulted ultimately in the rejection of the materials supplied. Thus, the disputes arose between the parties to the contract and the first respondent invoked the arbitration clause in the contract for settling those disputes. 3. The first respondent appointed the second petitioner Justice S. Padmanabhan, a former Judge of this Court as its arbitrator and as the second respondent failed to appoint its arbitrator when called upon to do so, the first respondent approached the Hon'ble Chief Justice of this Court for appointment of second arbitrator by filing O.P.No. 431 of 1999. The Hon'ble Chief Justice by an order appointed the 3rd petitioner, another former Judge of this Court as second arbitrator, on behalf of the 2nd respondent on 14-1-2000. Both the above appointed arbitrators nominated the first petitioner, another former Judge of this Court, as the third and Presiding Arbitrator on 14-3-2000. The three arbitrators entered on the reference on 18-3-2000 and commenced the arbitration proceedings. 4. It is further stated that the Arbitral Tribunal held as many as nine sittings, the second respondent remained ex parte in spite of several notices, though its local agent M/s. Black Gold Consultants and Engineers (P) Limited, Mumbai appeared by counsel and took part in the proceedings. Ultimately, the Arbitral Tribunal passed an Award on 14-10-2000 and all the parties were notified. Under the award, the first respondent gets Rs.5,58,98,054/- with future interest on Rs.3,13,89,465/- at the rate of 18 per cent per annum from the date of award till date of payment. In addition, the first respondent is entitled to recover from the 2nd respondent Rs.14,10,000/- towards cost of the arbitration of which Rs.11,10,000/- is the arbitrators' fees. The third respondent was the counsel for the first respondent in the arbitral proceedings and the fees of the arbitrators was fixed in his presence and with his consent. 5. The original award was sent to the first respondent on 20-9-2002 with a request for payment of the arbitrators' fees as fixed in the award. Inspite of the fact two years have elapsed since the passing of the award, the first respondent (claimant before the Arbitrators) has not chosen to pay the Arbitrators' fees even though the arbitral proceedings were initiated and award was passed at its instance. Inspite of the fact two years have elapsed since the passing of the award, the first respondent (claimant before the Arbitrators) has not chosen to pay the Arbitrators' fees even though the arbitral proceedings were initiated and award was passed at its instance. The first respondent had so far paid only Rs.50,000/- to each of the arbitrators and the second respondent had not paid any fee inspite of arbitrators' directions. The balance of fees payable to each of the arbitrators as per the directions in the award dated 14-10-2000 works out to Rs.3,20,000/-. The Arbitrators are entitled to be paid their fees by the first respondent. The petitioners have a legal right to get their fees from the first respondent who has a legal duty to honour its obligation to pay the fees of the arbitrators at whose instance they were appointed and whose services they had requisitioned. The first respondent is in law bound to pay the entire fees to the Arbitrators since the award has been passed in favour of the first respondent for the amount claimed by them and costs inclusive of 50 per cent of the arbitration fees payable by the opposite party to the arbitration proceedings. Having no other remedy, the first respondent being a State as defined in Article 12 of the Constitution of India, the petitioners have approached this Court for issuance of necessary direction. 6. The first respondent has filed a counter affidavit disputing various averments made in the affidavit filed in support of the above writ petition. It is stated that the arbitration clauses contain in the supply order between the first respondent and the second respondent namely M/s. Global Drilling Fluids Inc. which is a company registered in USA and carrying on business in USA. The dispute pertaining to the transaction was a International Commercial Arbitration (containing International Arbitration). As per Section 2 (f)(ii)of the Arbitration and Conciliation Act, the second respondent is a Body Corporate, which is incorporated in USA; accordingly application for appointment of Arbitrator could only be made by making an application to the Hon'ble Chief Justice of India. In respect of International commercial transaction, wherein the 2nd respondent is a foreign body corporate. In this case the application could only be made to the Hon'ble Chief Justice of India. In respect of International commercial transaction, wherein the 2nd respondent is a foreign body corporate. In this case the application could only be made to the Hon'ble Chief Justice of India. Inadvertently, overlooking this legal position, an application was made as O.P.No. 413/99 on the file of this Court. On knowing this position, an Arbitration Petition under section 11 (6) read with 12 (a) of the Arbitration and Conciliation Act, 1996 has been filed before the Supreme Court of India and the same is pending. As per para No. 17 (d) of the Award, arbitration fees and expenses, legal fees and expenses of Rs.14,10,000/- is directed to be paid by the 2nd respondent namely Global Drilling Fluids Inc. which is alone legally liable to pay the arbitration fees to the arbitrators. As such direction is to be issued only against the second respondent. There is no order or direction in the award, directing Oil and Natural Gas Corporation Limited to pay the above said sum of Rs.14,10,000/- As such the prayer and the relief claimed in this writ petition is unsustainable and not maintainable against the first respondent namely Oil and Natural Gas Corporation Limited. 7. In the light of the above pleadings, I have heard Mr. A.K. Sridharan, learned counsel for the petitioners, Mr. S.R. Sundaram, learned senior Central Government standing counsel for the first respondent, and Mr.D. Saravanan for third respondent. 8. The only point for consideration in this writ petition is, whether the petitioners are entitled to the balance of fees due to them as per the Award dated 14-10-2000. 9. I have already set out the facts leading to the arbitration proceedings; hence it is unnecessary to refer the same once again. As per the terms of the agreement between the respondents 1 and 2, the first respondent-Oil and Natural Gas Commission appointed Justice S. Padmanabhan, 2nd petitioner, a former Judge of this Court as Arbitrator. Since the second respondent Global Drilling Fluids Inc. Houston, U.S.A., failed to appoint its Arbitrator as per the agreement when called upon to do so, on the application filed by the first respondent in O.P.No. 431/1999, the Hon'ble Chief Justice by order dated 14-1-2000 in O.P.No. 431 of 1999, appointed Justice T. Somasundaram, third petitioner, a former Judge of this Court, as second Arbitrator on behalf of the second respondent. It is further seen that both the appointed Arbitrators namely petitioners 2 and 3 nominated the first petitioner-Justice G. Ramanujam, another former Judge of this Court as third and Presiding Arbitrator on 14-3-2000. It is further seen that the three Arbitrators entered on the reference on 18-3-2000 and commenced the arbitration proceedings. It is further seen that inspite of several notices, though its local agent M/s. Black Gold Consultants and Engineers (P) Limited, Mumbai appeared by counsel and took part in the proceedings, the 2nd respondent remained ex parte. Ultimately, after holding as many as 9 sittings, the Arbitral Tribunal passed an award on 14-10-2000. It is also seen that all the parties were duly notified. Under the award, the first respondent gets Rs.5,58,98,054/- with future interest on Rs.3,13,89,465/- at the rate of 18 per cent per annum from the date of award till date of payment. In addition, the first respondent is entitled to recover from the 2nd respondent Rs.14,10,000/- towards cost of the Arbitration of which Rs.11,10,000/- is the arbitrators' fees. It is the claim of the petitioners that the first respondent has so far paid only Rs.50,000/- to each of the arbitrators and inspite of requests on several occasions, even after sending the original award to the first respondent as early as on 20-9-2002 , the arbitrators' fees as fixed in the award has not been paid. The balance fee payable to each of the arbitrators as per the directions in the award dated 14-10-2000 works out to Rs.3,20,000/-. 10. It is useful to refer the relevant clause in the arbitration award dated 14-10-2000. Para 17 is relevant which is extracted hereunder: "17. Point No.6. For all the reasons stated above the AWARD is thus passed as follows: (a) The respondent Global Drilling Fluids Inc. 10. It is useful to refer the relevant clause in the arbitration award dated 14-10-2000. Para 17 is relevant which is extracted hereunder: "17. Point No.6. For all the reasons stated above the AWARD is thus passed as follows: (a) The respondent Global Drilling Fluids Inc. U.S.A. is directed to pay to the claimant M/s. Oil & Natural Gas Corporation Limited a sum of Rs.3,13,89,465/- (Rupees three crores thirteen lakhs eighty nine thousand four hundred sixty five only) as damages for the breach of contract committed by respondent along with a sum of Rs.2,22,64,208/- (Rupees two crores twenty two lakhs sixty four thousand two hundred and eight only) towards past interest making a total of Rs.5,36,53,493/- (Rupees five crores thirty six lakhs fifty three thousand four hundred ninety three only); (b) The respondent is also directed to pay to the claimant a sum of Rs.22,44,561/- (Rupees twenty two lakhs forty four thousand five hundred sixty one only) towards pendente lite interest; (c) the respondent is also directed to pay to the claimant future interest on Rs.3,13,89,465/- at the rate of 18% per annum from the date of Award till date of payment; and (d) the respondent is further directed to pay a sum of Rs.14,10,000/- (Rupees fourteen lakhs ten thousand only) towards costs of this Arbitration Proceedings i.e. 1.Arbitration fees and expenses?Rs.11,10,000/- 2. Legal fees and expenses - 3,00,000/- ----------------- Total Rs. 14,10,000/- =============== THIS AWARD IS MADE ON REQUISITE NON-JUDICIAL STAMP PAPER SIGNED AND PUBLISHED ON THIS FOURTEENTH DAY OF OCTOBER 2000 at CHENNAI. Sd/ G. Ramanujam (JUSTICE G. RAMANUJAM) (Retd.) Presiding Arbitrator Sd/- S. Padmanabhan (JUSTICE S. PADMANABHAN) (Retd.) Arbitrator Sd/- T. Somasundaran (JUSTICE T. SOMASUNDARAM)(Retd.) Arbitrator." Mr. S.R. Sundaram, learned senior Central Government Standing counsel, relying on para 17 (d) of the award, would contend that the 2nd respondent-Global Drilling Fluids Inc. Houston, U.S.A., alone was directed to pay a sum of Rs.14,10,000/- towards costs of the arbitration proceedings; accordingly the first respondent-Oil and Natural Gas Corporation Limited is not liable to pay the said amount. According to him, the petitioners are entitled to claim the said amount only from the 2nd respondent and no direction as claimed by them be granted against Oil and Natural Gas Corporation in this writ petition. According to him, the petitioners are entitled to claim the said amount only from the 2nd respondent and no direction as claimed by them be granted against Oil and Natural Gas Corporation in this writ petition. He also contended that the Hon'ble Chief Justice of this Court has no power to appoint an arbitrator and the entire arbitration proceedings including the award cannot be sustained. I am unable to appreciate both the contentions. 11. In so far as the second contention namely, the Hon'ble Chief Justice of India alone is competent to appoint an arbitrator is concerned, it is stated that under section 2 (f) (ii) of the Act, for appointment of arbitrator, the 2nd respondent namely Global Drilling Fluids Inc. Houston, U.S.A., could make application to the Hon'ble Chief Justice of India. It is to be noted that I have already referred to the fact that the first respondent-Oil and Natural Gas Corporation has appointed the second petitioner as their arbitrator. In the normal circumstance and as per the agreement, the second respondent has to appoint one arbitrator. In the absence of any such move by the second respondent, the first respondent-Oil and Natural Gas Corporation itself has filed an application before the Hon'ble Chief Justice of this Court for appointment of second arbitrator by filing an application in O.P.No.413/99. Inasmuch as the first respondent-Oil and Natural Gas Corporation themselves filed an application before the Hon'ble Chief Justice for appointment of second arbitrator by filing appropriate petition, after appointment of the Arbitrator, they participated in the arbitral proceedings and an award has been passed in their favour as claimed, I am of the view that the Oil and Natural Gas Corporation is not permitted to raise such objection at this stage. It is unfortunate that a Government Corporation like Oil and Natural Gas Corporation has taken such an objection at this stage after allowing the arbitrators to proceed and pass an award by spending considerable time; accordingly I reject the second contention. 12. Coming to the first contention that as per the award (para 17 (d), it is for the second respondent-Global Drilling Fluids Inc., U.S.A., to pay Rs.14,10,000/- towards costs of the arbitration proceedings. 12. Coming to the first contention that as per the award (para 17 (d), it is for the second respondent-Global Drilling Fluids Inc., U.S.A., to pay Rs.14,10,000/- towards costs of the arbitration proceedings. It is true that the second respondent-Global Drilling Fluids Inc., U.S.A., are liable to pay not only a sum of Rs.3,13,89,465/- as damages for breach of contract along with a sum of Rs.2,22,64,208/- towards past interest making a total of Rs.5,36,53,493/- in favour of Oil and Natural Gas Corporation, but also pay a sum of Rs.22,44,561/- towards pendente lite interest, future interest on Rs.3,13,89,465/- at the rate of 18 per cent per annum from the date of award till the date of payment and Rs.14,10,000/- towards costs of arbitration proceedings. In other words, it is for the first respondent-Oil and Natural Gas Corporation to recover all the above mentioned amounts as per the award from the second respondent-Global Drilling Fluids Inc., U.S.A. In other words, since the award was passed in favour of the Oil and Natural Gas Corporation with interest and costs of the arbitral proceedings, it but proper for them to pay the costs of the arbitration proceedings namely fees and expenses to the Arbitrators and recover the entire amount from Global Drilling Fluids Inc., U.S.A. The first respondent Oil and Natural Gas Corporation is not justified in asking the Arbitrators to proceed against the second respondent-Global Drilling Fluids Inc., U.S.A. The stand taken by the Oil and Natural Gas Corporation is unfortunate. Having paid Rs.50,000/- to each of the Arbitrators and in the light of the Award which enables them to recover the entire arbitration expenses, including arbitration fees and expenses, legal fees and expenses from the Global Drilling Fluids Inc., U.S.A., I hold that it is the first respondent-Oil and Natural Gas Corporation to pay the entire amount as per para 17 (d) of the Award to the Arbitrators-petitioners herein and recover the same from the Global Drilling Fluids Inc., U.S.A. 13. As rightly claimed, the petitioners have a legal right to get their fees from the first respondent who has a legal duty to honour its obligation to pay the fees of the Arbitrators at whose instance they were appointed and whose services they had requisitioned. As rightly claimed, the petitioners have a legal right to get their fees from the first respondent who has a legal duty to honour its obligation to pay the fees of the Arbitrators at whose instance they were appointed and whose services they had requisitioned. The first respondent is in law bound to pay the entire fees due to the arbitrators since the award has been passed in favour of the first respondent for the amount claimed by them and costs inclusive of arbitration fees, I am satisfied that the petitioners are entitled for the balance of fees and the first respondent is liable to pay the same. 14. In the light of what is stated above, the first respondent-Oil and Natural Gas Corporation is directed to pay the balance fees due to each of the three Arbitrators which works out to Rs.3,20,000/- (Rupees three lakhs and twenty thousand only) each as per the direction of the Award dated 14-10-2000 within a period of two weeks from the date of receipt of a copy of this order. Writ Petition is allowed. No order as to costs.