Court allows Uttar Bihar Gramin Bank's objection petition against arbitral award

Principal District Judge, Muzaffarpur has allowed Uttar Bihar Gramin Bank's objection petition against the Arbitral Award dated 29.10.2019 in its case with HCL Infotech, a wholly owned subsidiary of HCL Infosystems.

Tue 6 Oct 2026

Arbitral Award Claims

about ₹13.41 crore

Interest Awarded

18% per annum

Costs Awarded

₹20 lakh

What happened

HCL Infosystems has informed the exchanges that HCL Infotech Limited, its wholly owned subsidiary, has received a judgment passed by the Principal District Judge, Muzaffarpur, Bihar, in the Section 34 Objection Petition in the matter of Uttar Bihar Gramin Bank (UBGB) versus HCL Infotech Limited.

• The petition was shared by UBGB challenging the Arbitral Award dated 29.10.2019.
• Under that award, certain claims of HCL Infotech to the tune of approx. ₹13.41 Crore, together with pendente lite and future interest at 18% per annum, and a further ₹20 lakh towards costs, were allowed.
• The counter claims of UBGB were rejected.
• The Principal District Judge has allowed UBGB's objection petition by judgment dated 16.09.2026.

What the judge held

• The Arbitral Tribunal failed to make a categorical finding that the termination of the Service Agreement dated 11.12.2012 by UBGB was legally invalid.
• The Tribunal mechanically relied upon Section 31(7) of the Arbitration and Conciliation Act, 1996 while awarding interest at 18% per annum, without examining the applicable statutory provision or recording reasons for treating 18% as a reasonable rate.
• The claims of HCL Infotech that are independent of the legality of termination and are legally and factually severable shall remain unaffected.

What the company says

HCL Infotech is evaluating the judgment and the remedies available. It will take further action as may be advised and considered appropriate, in accordance with applicable law, before the competent court or High Court at Patna, as the impugned judgment appears to be ambiguous.

How to read this

This is a development in litigation involving a wholly owned subsidiary, rather than a fresh claim or order on the listed entity itself. The award that was earlier in the subsidiary's favour has been challenged successfully at this stage, while the judgment itself states that claims severable from the termination issue remain unaffected. The company has said it is evaluating the remedies available, and the update records the quantum involved at the award stage.

For a retail reader, the points to track are the figures stated in the update – ₹13.41 Crore of claims, 18% per annum interest and ₹20 lakh costs – and the company's statement that it will pursue remedies before the competent court or High Court at Patna.

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