Section 78: Costs

Arbitration and Conciliation Act, 1996 • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1996
Statutory Defined Terms in this Section: (Click any term for official legal definition)

Legal Commentary & Landmark Judgments: Section 78

Section 78 of the Arbitration and Conciliation Act, 1996 governs the costs of conciliation, defining allowable items (conciliator's fee, travel, expert advice, administrative assistance) and mandating that costs shall be borne equally by the parties unless agreed otherwise.

  • Fixing of Costs upon Termination: Upon termination of conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.
  • Definition of 'Costs': Includes: (a) fee and expenses of conciliator and witnesses; (b) expert advice; (c) administrative assistance under Section 68; (d) other expenses incurred in connection with proceedings.
  • Equal Apportionment Rule: The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment.
  • Own Expenses Borne Individually: All other expenses incurred by a party shall be borne by that party.
Key Landmark Precedents:
  • Haresh Dayaram Thakur v. State of Maharashtra, (2000) 6 SCC 179: The Supreme Court highlighted that costs in conciliation under Section 78 are intended to be non-punitive and shared equally to foster collaborative dispute resolution.
  • Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24: Discussed the equitable sharing of administrative costs in alternative dispute resolution.
Courtroom Practice & Strategic Litigation Guidance:

In conciliation settlement agreements under Section 73, specify whether any party is reimbursing the other's share of costs; in absence of agreement, Section 78(2) mandates a strict 50:50 equal split.