The Supreme Court is examining a challenge by members of an arbitral tribunal against a Rajasthan High Court order that curtailed their fees over the prolonged pendency of arbitration proceedings. While hearing the arbitrators’ plea, the top court itself expressed concern over the extraordinary time taken to bring the dispute to a conclusion, remarking that the delay was far too extensive.
The matter arises out of a high-value dispute between HCL Infosystems and Rajasthan’s power distribution companies. Arbitration was invoked in 2019, but the proceedings continued for years without culminating in an award. By the time the matter reached judicial scrutiny, the tribunal had conducted nearly 200 hearings, while substantial sums had already been paid towards the arbitrators’ remuneration.
Taking exception to the prolonged nature of the proceedings, the Rajasthan High Court had earlier intervened and imposed a financial consequence on the tribunal. It directed that the fees already paid to the arbitrators be reduced by 5 per cent for every month of delay attributable to the tribunal beyond April 30, 2025. The High Court had also sought to expedite the process by directing that hearings be conducted on a day-to-day basis and the arbitration be brought to its logical conclusion within a prescribed timeframe.
Aggrieved by the curtailment of their fees, the arbitrators approached the Supreme Court. The challenge, however, prompted the Bench to examine the larger question of whether the arbitration itself had drifted far beyond the timelines ordinarily associated with an alternative dispute resolution mechanism.
The Supreme Court noted that arbitration is intended to offer parties a comparatively efficient and expeditious route for resolving commercial disputes. Yet, the Bench appeared unconvinced that proceedings extending over several years and involving nearly 198 sittings could be reconciled with that underlying objective.
The arbitrators pointed to circumstances including the death of one member of the tribunal and the consequent appointment of a replacement. However, the Court observed that the overall delay remained a matter of serious concern, with the Bench noting that the proceedings had taken too long.
The matter has now assumed significance beyond the immediate dispute over remuneration, as it raises broader questions about accountability, timelines and escalating costs in arbitration. The Court has asked the concerned parties to place their written submissions on record within the stipulated period.
For the present, the arbitral process may continue, but the tribunal will not pronounce or formally communicate its final award without further orders from the Supreme Court. The dispute, therefore, remains poised at the intersection of two competing concerns—an arbitrator’s entitlement to agreed remuneration and the judiciary’s increasing insistence that arbitration must not replicate the very delays it was designed to avoid.
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