Costs Allocation Under the Amended Indian Arbitration Law : A Critique

Section 31(8) of the Arbitration and Conciliation Act, 1996 as originally enacted dealt with costs in arbitration. The evolution of the law on the subject led to dissatisfaction. After numerous calls for reforms, the Law Commission of India in its 246th Report sought overhaul of the existing law on the subject. Based on the said Report, Section 31(8) stood replaced by a new provision on costs in the form of Section 31A. This paper examines if the new regime on costs allocation is satisfactory, especially in the light of objectives of the recent amendments. The paper specifically focuses on whether arbitral tribunal and courts award costs in the arbitral proceedings or in arbitration related court proceedings respectively in consonance with the objectives of the latest amendments to the Act