The Rajasthan High Court has raised key concerns over prolonged arbitral proceedings and mounting costs in a dispute between HCL Infosystems Ltd. and Jaipur Vidyut Vitran Nigam Ltd. (JVVNL), while hearing a batch of connected writ petitions.

The matter stems from a 2009 work order, with arbitration commencing in 2020 before a three-member arbitral tribunal constituted in 2019.

HCL Infosystems challenged the ongoing proceedings, alleging that the arbitral tribunal fixed fees on an ad hoc basis at ₹2.5 lakh per sitting per arbitrator, contrary to the model fee structure under Schedule IV of the Arbitration and Conciliation Act, 1996. The company further submitted that the parties have incurred approximately ₹14.5 crore in litigation costs so far and that its 2022 application questioning the fee structure remains pending.

The petitioner also raised allegations of bias, claiming that the tribunal had lost its independence and impartiality. It additionally challenged repeated extensions granted under Section 29A, particularly the order dated February 24, 2026, contending that the proceedings had been unduly prolonged without sufficient cause.

Opposing the plea, JVVNL argued that the arbitration is at an advanced stage, with arguments concluded on its side in June 2025, and that delays are attributable to HCL. It maintained that Schedule IV is not strictly applicable to ad hoc arbitration and that arbitral fees were voluntarily paid. The allegations of bias were also termed unsubstantiated and not raised before the tribunal in accordance with law.

Taking note of rival submissions, Justice Sameer Jain observed that although the impugned extension is limited to four months (till September 30, 2026), the case raises significant questions regarding arbitral fee structures, independence of arbitrators, and the legality of granting extensions under Section 29A during the pendency of related challenges.

Considering the wider ramifications of the issues involved, particularly as the petitioner is a public sector entity, the Court directed the Advocate General to assist in the matter. It also called for records from the Commercial Court and listed the case for final disposal on May 4, 2026.

Appearances: 

For Petitioner(s) : Mr. Kartik Seth with Ms. Shilpa Saini

For Respondent(s) : Mr. R. N. Mathur, Sr. Advocate assisted by Mr. Shailesh Kapoor; Mr. Arif Jamwal; Mr. Lokesh Kumar Atrey; Mr. Shantanu Gupta; Mr. Rahul Pandit