Arbitration and Conciliation Act Section 38 — Deposits

CHAPTER X — Miscellaneous

Civil

Summary

Sub-section (1) allows the arbitral tribunal to set an amount of deposit, or an additional deposit, as an advance payment for the costs it expects will be incurred in relation to a claim. If a counter-claim has also been submitted, the tribunal may set a separate deposit amount for the claim and for the counter-claim.

Sub-section (2) states that the deposit must be paid in equal shares by both parties. If one party fails to pay their share, the other party may pay that share as well. If the other party also does not pay the share for the claim or the counter-claim, the arbitral tribunal may suspend or terminate the proceedings for that particular claim or counter-claim.

Sub-section (3) requires that when the arbitral proceedings end, the arbitral tribunal must give the parties an account of the deposits it received and return any unused balance to the party or parties concerned.

Official Text

(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.

(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.

(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be.