SC quashes ₹7,687crore award against DMRC as ‘patently illegal’

The Supreme Court on Wednesday quashed an arbitral tribunal award directing the Delhi Metro Rail Corporation (DMRC) to pay ₹7,687 crore to Delhi Airport Metro Express Private Limited , a special purpose vehicle of Reliance Infrastructure Limited and Spain’s Construcciones Y Auxiliar de Ferrocarriles SA.

A threejudge Bench headed by Chief Justice of India D.Y. Chandrachud exercised the top court’s rare powers under Article 142 of the Constitution in a curative petition filed by the DMRC to lift the “exorbitant” liability off the public utility’s shoulders.

Chief Justice Chandrachud, who authored the 39page judgment, said DMRC had suffered a “grave miscarriage of justice” from the arbitral award of 2017.

Judgments set aside

The Supreme Court also set aside its own judgment of 2021 in the case. A twojudge Bench of the top court had upheld the 2017 arbitral award, overruling the decision of a Division Bench of the Delhi High Court. The Division Bench of the High Court had found the arbitral award against DMRC perverse and irrational.

In a scathing comment about the top court’s unwarranted interference in 2021, Chief Justice Chandrachud observed that “by setting aside the judgment of the Division Bench, this court had restored a patently illegal award which saddled a public utility with an exorbitant liability”.

AttorneyGeneral R. Venkataramani and senior advocate K.K. Venugopal, for DMRC, had argued that the Division Bench of the High Court had found the arbitral award “patently illegal” since the tribunal had ignored the vital evidence of Commissioner Metro Rail Safety (CMRS) certification of the Metro line while deciding the validity of the termination of the agreement.

Agreeing with DMRC, the Bench observed how even the Supreme Court, in 2021, had incorrectly considered the CMRS certificate to be irrelevant to the question of the validity of the termination.

DMRC suffered a grave miscarriage of justice from the arbitral award of 2017

Amount to be refunded

The judgment ordered the discontinuation of execution proceedings before the High Court for enforcing the arbitral award. It directed any amount deposited by DMRC, following the 2021 judgment, to be refunded.