Under Section 31A(2)(a) of the Act, in the absence of reasons being re…

Question

Under Section 31A(2)(a) of the Act, in the absence of reasons being recorded, the general rule for costs in arbitration is:

Accepted Answer

C. {'text': 'The unsuccessful party will be ordered to pay the costs of the successful party', 'label': 'C'}

1. Section 31A of the Act (inserted in 2015) lays down the cost regime for arbitration.
2. Under sub-section (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 will be ordered to pay the costs of the successful party**".
3. Sub-section (2)(b) permits a different order for reasons to be recorded in writing.
4. Costs include arbitrator/court fees, legal fees, administration fees and other expenses (Explanation to Section 31A(1)).
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 13 (Arbitration and Conciliation Act, 1996), pp. 314-333._

Answer

{'text': 'The State Government shall reimburse all costs in every case regardless of the outcome under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'A'}

Answer

{'text': 'Both parties will share all costs equally in every case regardless of the outcome under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'B'}

Answer

{'text': 'The Central Government shall reimburse all costs in every case regardless of the outcome under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'D'}