A simmering dispute that began over a decade ago has drawn sharp judicial ire, with the Rajasthan High Court calling out the staggering delay in concluding arbitration proceedings—despite fees touching an eye-watering ₹14.5 crore.
At the centre of the controversy lies a prolonged tussle between three State-run electricity distribution companies and HCL Infosystems Limited. The arbitration, invoked in 2019 and formally underway since 2020, has yet to deliver a final outcome.
Presiding over the matter, Justice Sameer Jain did not mince words. The Court described the situation as “appalling,” noting that while massive sums have already been paid to the arbitral tribunal, the dispute itself remains stuck in procedural limbo. Extensions have come and gone, but resolution has not.
The Bench flagged a deeper concern: arbitration, designed as a faster alternative to traditional litigation, appears here to have lost its defining edge. Instead of swift adjudication, the process has been bogged down by repeated extensions and unresolved objections.
The dispute traces back to 2009, when contracts under the Restructured Accelerated Power Development and Reforms Programme were awarded to HCL Infosystems. A decade later, disagreements escalated into arbitration.
The State utilities have raised multiple red flags. They argue that the tribunal’s fee structure strayed from the framework laid down under Schedule IV of the Arbitration and Conciliation Act, opting instead for a per-sitting fee model. An application challenging these fees, filed in 2022, remains pending without resolution.
More seriously, the companies have questioned the tribunal’s neutrality, alleging bias and loss of independence—claims that, if substantiated, could strike at the very legitimacy of the proceedings.
On the other side, HCL Infosystems has pushed back, maintaining that the arbitration is nearing its conclusion and that a short extension would suffice to wrap things up. The company has dismissed the bias allegations as unfounded.
Yet, the Court appears unconvinced that more time alone will fix what has become a deeply entangled process. It has decided to examine the matter in detail, particularly the legality of granting extensions under Section 29A while key challenges—on fees and impartiality—remain unresolved.
Recognising the broader implications, especially since public sector entities are involved, the Court has sought assistance from the State’s top legal officer and scheduled a priority hearing.
At stake is more than just one dispute—it is a test of whether arbitration, often touted as efficient and cost-effective, can live up to its promise when timelines stretch and costs spiral.
