New Delhi: HCL Infosystems has moved the Supreme Court against a controversial judgment of the Rajasthan High Court where it had reduced the already-paid fees to arbitration tribunal members, while holding them responsible for giving unwarranted adjournments and lack of procedural discipline.
HCL Infosystems’ appeal further questioned the order for fixing a timeline for the arbitral tribunal to conclude the arbitration proceedings and deliver the award.
The order underlined a 30-day deadline to complete the hearings and another 15 days to pronounce the final award.
The tribunal, headed by a former Supreme Court judge and comprising two former high court judges, had been hearing arbitration proceedings between HCL and Jaipur Vidyut Vitran Nigam Ltd over a technology contract since 2019.
The high court’s 27 May judgment, running into 110 pages, had asked tribunal members to return the fee after adjusting the revised fee, fixed in terms of its order, to the parties involved in the dispute.
In its judgment, the high court had highlighted the case as a testament to a deeper problem within the arbitration ecosystem and raised concerns over the alternative dispute redressal mechanism’s efficacy as a quick remedy to commercial litigation.
“This direction is necessitated not only to remedy the financial prejudice caused to the parties, but also to reinforce adherence to the statutory mandate and restore accountability within the arbitral process,” the high court had said.
On Tuesday, a partial working bench led by Justice K.V. Viswanathan heard HCL’s appeal. The company’s lawyer, senior advocate K.G. Raghavan, urged the bench to hear the appeal since its directions were unworkable, particularly the one that asked the tribunal to conduct day-to-day hearings from 31 May, 2025 to 30 June, 2026 and then render an award within 15 days.
Jaipur Vidyut Vitran Nigam Limited’s (JVVNL) counsel, senior advocate Shyam Diwan and advocate Kartik Seth, informed the bench that the state department too had filed an appeal against the high court judgment. Its grievance is that when the high court had faulted the arbitrators for the delay in the matter then it should have reconstituted the tribunal with new members.
On hearing both sides, Justice Viswanathan’s bench listed the matter for July. However, it stayed the operation of two high court directions—asking the tribunal to declare the award within 15 days and return of the fee.
Quoting former Chief Justice P.N. Bhagwati’s statement “procedure is but a means to an end, not an end in itself,” the high court had said: “In the context of arbitral proceedings, where the legislative intent is to ensure a swift, efficient and cost-effective resolution of disputes, procedure must remain subservient to the ultimate goal of adjudication.”
Adding, “Efficiency, expedition, and fairness must guide the conduct of proceedings, so that arbitration remains a pragmatic and litigant-centric mechanism, yielding meaningful and timely outcomes rather than devolving into a prolonged and burdensome exercise.”
The present case, court added, exemplified a clear deviation from the foundational objectives of the Arbitration and Conciliation Act.
“That in the present facts, the conduct of the Arbitral Tribunal, marked by a lethargic and casual approach, repeated and unwarranted adjournments, and fixation of disproportionately high fee structures, including session wise or ‘reading’ fees, has undermined the very spirit of arbitration,” it had remarked.
According to HCL’s appeal, the high court mandate to hold day-to-day hearings was arbitrary and in complete disregard to the statutory framework. The timeline was unworkable and unreasonable, considering the dispute before the tribunal required detailed examination of the extremely technical complex and voluminous arbitral record ranging approximately more than 50,000 pages.
It added that the high court order caused grave prejudice to HCL’s right to a fair and effective adjudication in arbitration proceedings, rendering the arbitral process inefficacious and contrary to the fundamental principles governing proceedings under the law.
According to HCL’s appeal in the Supreme Court, the high court had failed to consider and decide any of the substantive grounds raised in the two petitions that were decided through its May 2026 judgment.
Both HCL and JVVNL had moved the high court on separate occasions.
HCL had approached it against the Commercial Court’s September 2024 order, which extended the term of the arbitral tribunal. This order came on HCL’s application under section 29A of the Arbitration and Conciliation Act. However, it was subject to certain conditions, which HCL noted in its plea before high court interfered with the tribunal’s duty to afford a fair hearing.
In February this year, JVVNL, too, moved an appeal before the high court. The move came soon after the Commercial Court allowed HCL’s second request to extend the tribunal’s tenure till September 2026.
The high court judgment set aside the Commercial Court’s February 2026 order, while upholding its 2024 directions that set a timeline for the tribunal to end its arbitration proceedings.
HCL submitted in its appeal the high court has erroneously opined against the tribunal for the delay. It has blamed JVNNL for being non-available on crucial days to address arguments. The company has also attributed the delay to the high court as well, saying it had ordered status quo of the arbitration proceedings when it commenced regular hearing from 4 May onwards.
(Edited by Amrtansh Arora)
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