(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, 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 the counter-claim is 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 return any unexpended balance to the party or parties as the case may be.
Legal Commentary & Landmark Judgments: Section 38
Section 38 of the Arbitration and Conciliation Act, 1996 empowers the arbitral tribunal to fix the amount of the deposit as an advance for the costs of arbitration, requiring both parties to pay in equal shares, and authorizing termination or suspension upon default.
If a recalcitrant respondent defaults on paying their half share of tribunal fees, the claimant should deposit the respondent's share under Section 38(2) Proviso; the amount can be claimed as interim costs or awarded with interest in the final award.