Rajasthan HC Slams Arbitral Tribunal Over ₹14.5 Crore Fee and Delay
Schedule IV Fee Structure Ignored
Section 29A Extensions Under Scrutiny
By Our Legal Correspondent
New Delhi: May 04, 2026:
The Rajasthan High Court has sharply criticized an arbitral tribunal for failing to decide a dispute pending since 2019 despite parties paying nearly ₹14.5 crore in fees. The Court flagged serious concerns about delays, exorbitant costs, and questions of impartiality, raising important issues under the Arbitration and Conciliation Act, 1996
In disputes involving inheritance and ownership of family property, courts often examine the nature of rights claimed by legal heirs and the validity of supporting documents before determining entitlement. A significant judicial reference in this regard is Narinder Singh Rao vs AVM Mahinder Singh Rao & Others inheritance and property rights judgment , where the court addressed competing claims among family members and emphasized that succession and ownership must be established through proper legal evidence and applicable statutory provisions. The ruling highlights that courts rely on factual analysis and legal principles to ensure fair resolution of complex property disputes.
Background of the Dispute
The case stems from contracts awarded under the Restructured Accelerated Power Development and Reforms Programme (RAPDRP) in 2009 to HCL Infosystems Limited. Following disputes, arbitration was invoked in 2019, and proceedings began in 2020 before a tribunal comprising a former Supreme Court judge and two retired High Court judges.
Despite years of hearings and payments amounting to ₹14.5 crore in arbitral fees, the tribunal has not delivered a final award. The Rajasthan High Court, presided by Justice Sameer Jain, described the situation as “appalling,” noting that substantive adjudication has been bogged down by repeated procedural extensions.
Key Legal Issues Raised
- Schedule IV of the Arbitration and Conciliation Act, 1996
- Schedule IV prescribes a model fee structure for arbitrators in India.
- In this case, fees were fixed at ₹2.5 lakh per sitting per arbitrator on an ad hoc basis, far exceeding the statutory framework.
- The Court highlighted that deviation from Schedule IV undermines transparency and fairness in arbitration.
- Section 29A – Time Limits for Arbitration
- Section 29A mandates that arbitral awards must be delivered within 12 months, extendable by six months with party consent.
- Courts may grant further extensions, but repeated reliance on Section 29A has led to prolonged delays.
- The Rajasthan HC questioned the legality of granting extensions while challenges to fee structures and impartiality remain pending.
- Independence and Impartiality of Arbitrators
- Allegations of bias were raised against the tribunal, with claims that independence and impartiality had been compromised.
- The Court emphasized that impartiality is the cornerstone of arbitration, and any perception of bias erodes confidence in the process.
- Public Sector Burden
- The petitioners—three Rajasthan electricity distribution companies—argued that exorbitant fees and delays impose a heavy burden on public funds.
- The Court acknowledged that disputes involving public sector entities have wider ramifications, necessitating stricter scrutiny.
Court’s Observations
Justice Jain noted that time is the essence of arbitral proceedings, and repeated extensions defeat the purpose of arbitration as a speedy alternative to litigation. The Court sought assistance from the State Advocate General and listed the matter for detailed hearing, signalling that systemic reforms may be necessary.
This case highlights the tension between ad hoc arbitration practices and the statutory framework designed to ensure efficiency and affordability.
Citation: Jaipur Vidyut Vitran Nigam Ltd v. HCL Infosystems Ltd, Rajasthan High Court, April 2026
FAQ: Quick Legal Understanding
Q1. What is Schedule IV of the Arbitration Act?
It provides a model fee structure for arbitrators to ensure transparency and prevent exorbitant charges.
Q2. Why did the Rajasthan HC criticize the tribunal?
Because despite receiving ₹14.5 crore in fees, the tribunal failed to deliver an award since 2019, relying instead on repeated extensions.
Q3. What does Section 29A of the Arbitration Act say?
It sets strict timelines for arbitration awards—12 months, extendable by six months with consent, and further only by court order.
Q4. Can arbitrators fix fees outside Schedule IV?
While ad hoc arbitrations often deviate, courts have increasingly emphasized adherence to Schedule IV to prevent abuse.
Q5. What happens if arbitrators delay proceedings?
Courts can intervene, terminate mandates, or refuse extensions under Section 29A, ensuring accountability.
Q6. Why is impartiality critical in arbitration?
Because arbitration is chosen for neutrality and efficiency; any bias undermines trust and enforceability of awards.
Conclusion
The Rajasthan High Court’s intervention underscores the urgent need for reform in arbitral fee structures and timelines. By questioning the legality of repeated extensions and highlighting the misuse of ad hoc fee arrangements, the Court has sent a strong message: arbitration must remain efficient, impartial, and affordable.
This ruling could influence future cases, pushing India’s arbitration framework closer to global best practices and ensuring that parties—especially public sector entities—are not trapped in costly, endless proceedings.