SC Overturns DMRC's Rs 2,782 Crore Payment Order To Reliance Infra Subsidiary
The Supreme Court reversed its earlier judgement of 2021 on Wednesday, nullifying the directive for the Delhi Metro Rail Corporation (DMRC) to pay Rs 2,782.33 crore plus interest to Delhi Airport Metro Express (DAMEPL), a subsidiary of Reliance Infrastructure.
This ruling pertains to a dispute arising from the construction of the Airport Metro Express Line project in the national capital.
The apex court's decision came in response to a curative petition filed by DMRC, challenging the 2021 judgement that upheld the 2017 arbitral award favouring DAMEPL. Chief Justice of India DY Chandrachud, leading a three-judge bench, deemed the Delhi High Court division bench's decision to partially set aside the arbitral award as well-considered.
The court highlighted a lack of valid basis for its previous interference in the matter and acknowledged the grave miscarriage of justice resulting from the restoration of what it termed a "patently illegal award."
As part of its ruling, the Supreme Court ordered the discontinuation of execution proceedings initiated by DAMEPL to enforce the arbitral award. Additionally, any amounts deposited by DMRC in compliance with the earlier judgement are to be refunded, with provisions for restoration of funds paid under coercive measures.
The court emphasised the exceptional circumstances of the case, cautioning against routine exercise of its creative jurisdiction. It stressed the need for a rigorous assessment of each case's merits to avoid unwarranted judicial intervention in arbitration matters.
The legal dispute originated from DAMEPL's termination of its concession agreement with DMRC, citing unresolved construction defects within the stipulated time frame. Despite the agreement stipulating DMRC's responsibility for civil works and obtaining necessary clearances, DAMEPL alleged deficiencies in the construction, prompting arbitration proceedings.
The arbitral tribunal's findings, including extensive analysis of structural defects and DMRC's remedial efforts, formed the basis of the disputed award. However, the Supreme Court deemed the arbitral process flawed, leading to an unjust outcome.
Union Minister Hardeep Singh Puri hailed the Supreme Court's judgement as historic, congratulating DMRC on its favourable outcome in the protracted legal battle.
This ruling signifies a pivotal moment in the resolution of contractual disputes involving public utilities and underscores the importance of judicial scrutiny in safeguarding fairness and justice in arbitration proceedings.
