August brought two high-stakes commercial disputes in India to an unusual point – after years of hearings, both were sent back to the starting line. At the National Company Law Tribunal in Delhi, seven insolvency petitions against low-cost airline SpiceJet over unpaid dues to lessors will now have to be heard afresh by a new bench, nearly two years after the cases were filed. At the Bombay High Court, a two-judge bench that had heard Skoda Auto Volkswagen’s challenge to a tax demand over vehicle imports released the case from its board over a year after reserving its order, paving the way for a new bench to hear it all over again.
Two cities, two different forums, two very different disputes, and two completely different reasons as to why, but they share one striking feature -- years of litigation have procedurally been reset. For the companies involved, that means more time, more uncertainty and potentially significant costs. On the other hand, for the courts, it means that the judicial work already done will have to be revisited. The question is not merely why these cases have been delayed, but who bears the cost when commercial litigation has to start over?
SpiceJet, which was fighting insolvency pleas from eight lessors, was given several opportunities by the insolvency court to settle its dues. It failed to do so until the last moment. On the day the court was due to pronounce its order, the airline informed the bench that it had reached a settlement with one of the lead lessors. That development upended the proceedings, leaving seven petitions still pending. With one of the judges due to retire shortly thereafter, the matter had to be placed before a new bench, effectively resetting the clock.
Volkswagen’s dispute concerns a tax demand of more than 110 billion rupees, a case that was argued for about a week and reserved for orders in April last year. Over a year later, no verdict had been delivered. Supreme Court guidelines ordinarily require judgments to be pronounced within three months of being reserved. The Bombay High Court was unable to meet that timeline citing “exigency of work”, and released the case for a fresh hearing before another bench.
The Cost of Starting Over
Whatever the reason for these resets, the commercial consequences are real. For SpiceJet, the development offers some breathing room, allowing it more time to negotiate with its lessors. But for the seven petitioners, it means another wait, possibly a long one at that, for a verdict, and also for the millions of rupees in dues they are owed by the airline. Volkswagen, meanwhile, will have to continue to operate under the cloud of a potential liability of billions of rupees, an uncertainty large enough to influence everything from financial planning to business decisions.
Uncertainty is only part of the cost. Prolonged litigation also carries a less visible but very real financial burden. Companies must continue to incur legal and advisory fees, and provision for litigation-related expenses. Depending on the circumstances, companies may also have to account for the possibility of an adverse outcome. The longer a dispute remains unresolved, the longer these costs and uncertainties remain embedded in a company's books and decision-making. Turning the clock back on an already long-drawn litigation duplicates not only legal processes but also the actual financial costs behind them.
The duplication is not limited to monetary costs. It also consumes scarce judicial time and resources. Legal teams will have to revisit arguments, evidence and documents, often with updates, but more importantly, judges have to spend time re-hearing and re-examining all the case material. This is more than the usual cost of waiting for justice. It is the cost of having to repeat the process and effectively paying twice for justice. When that cost is paid in judicial time, it is particularly dear in a system already strapped for both, judges and time.
This is not the first time judicial continuity has been disrupted, but these cases highlight the need to preserve institutional work when matters move between benches. A change in bench may have little consequence when a case is straightforward or at an early stage. But when complex commercial disputes such as SpiceJet and Volkswagen involve hundreds of documents and hours of arguments, how much of that work can realistically be absorbed by a new bench from the record alone? If a new bench must give the parties a fair hearing, a substantial part of that time and effort will inevitably have to be spent again.
When SpiceJet informed the NCLT of its last-minute settlement, the tribunal recorded its displeasure with the parties’ conduct and imposed costs for “wasting judicial time”. The amount may be small in the larger scheme of things, but the censure is significant. The Volkswagen case, meanwhile, exposes a different paradox. The Supreme Court’s tighter timelines for delivering judgments are intended to prevent cases from languishing after arguments have concluded. Yet, a bench unable to meet that timeline, cited “exigency of work” and had to release the case, setting up the possibility of precisely the duplication and delay that such timelines seek to prevent.
The larger concern then is not just judicial delay, but the cost of starting over. When a case has already taken years of legal and judicial time, a rehearing adds another layer of cost for all. The question is whether the system has enough safeguards to ensure that the work already done does not have to be done all over again.
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