India
On Wednesday, the Supreme Court reversed its 2021 ruling, which upheld an arbitration award that had directed Delhi Metro Rail Corporation (DMRC) to pay a Reliance Infrastructure subsidiary ₹7,687 crore (interest included) about a dispute involving the Airport Express Metro line.
As a result of DMRC’s curative plea against Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of the Anil Ambani-led company, the court rendered a judgment that it claimed caused a “grave miscarriage of justice.” This rare overturning of a decision at what is essentially the last possible stage of the legal process.
A rare overturning of a decision at what is essentially the last avenue for judicial recourse, the judgment was rendered in response to a curative plea filed by DMRC against Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of the Anil Ambani-led company. The court found that the decision constituted a “grave miscarriage of justice.”
The Delhi Airport Express Metro line, which DAMEPL initially ran, is at the centre of the controversy. Citing structural flaws that rendered it unsafe for passengers, the corporation terminated the agreement in 2012 and used the arbitration clause to demand a termination fee and related expenses. After DAMEPL emerged victorious in the arbitration dispute in 2017, the total money accumulated has now reached around ₹7,700 crore.
Before the case made it to the Supreme Court, where the ruling from the high court was reversed and the obligation was restored in 2021, DMRC initially challenged the decision at the high court, which set it aside. Up until Wednesday, when the top court changed its position at the level of a curative petition, the ruling was maintained in a review case filed by the DMRC in November 2021.
The chief justice of India (CJI), Dhananjaya Y. Chandrachud, led a three-judge panel that made it clear that “the exercise of the curative jurisdiction of this court should not be adopted as a matter of ordinary course,” acknowledging the unusual nature of the current decision. It is not appropriate to employ the curative jurisdiction to create a fourth or fifth level of judicial intervention in an arbitral ruling.
Regarding the development, DMRC remained silent. But Hardeep Singh Puri, the union minister for housing and urban affairs, wrote on X, saying, “Satyamev Jayate! The Honorable Supreme Court rendered a landmark decision in the case of the Airport Metro Line, ruling on a curative petition submitted by @OfficialDMRC. Many thanks to Team DMRC for obtaining this historic decision.
The SC ruled in the ruling that any deposited funds had to be reimbursed, stating that “the arbitral tribunal has perverted the arbitration process to provide an undeserved windfall to DAMEPL.” Additionally, it revoked DAMEPL’s attempt to lawfully compel DMRC to carry out the arbitral ruling through high court proceedings.
“Reliance Infrastructure wishes to clarify that the order dated April 10, 2024, passed by the Supreme Court does not impose any liability on the company and the company has not received any money from DMRC/DAMEPL under the arbitral award,” Reliance Infrastructure Limited said in a statement released shortly after the SC order. However, the ruling stated that DMRC paid ₹2,599.18 crore, with ₹5,088 crore still owing as of January 31, 2024, according to DAMEPL attorneys.
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