The Hon’ble Supreme Court of India (Supreme Court), in the case of Delhi Metro Rail Corporation Limited (DMRC) vs. Delhi Airport Metro Express Private Limited (DAMEPL), annulled the arbitral award which was in favour of DAMEPL on the grounds of Patent Illegality under section 34 of the Arbitration and Conciliation Act, 1996, exercising its curative jurisdiction. The Supreme Court held that the interpretation of the termination clause by the Tribunal was unreasonable and that the award overlooked vital evidence.
Holding a merits-based review of the arbitral award in the DMRC-DAMEPL case, the Supreme Court, through Chief Justice DY Chandrachud, Justice BR Gavai and Justice Surya Kant, concluded that the arbitral tribunal had overlooked vital evidence and reached an unreasonable conclusion. This led the Supreme Court to annul the award and direct DAMEPL to refund a significant sum already paid by DMRC.
DMRC challenged the arbitral award through multiple legal avenues: a petition under Section 34 of the Arbitration and Conciliation Act, 1996, an appeal under Section 37 of the Act, a SLP under Article 136 of the Constitution, and a review petition under Article 137. After these challenges were exhausted, DMRC filed a curative petition under Article 142, which allows the Supreme Court to exercise its powers to do complete justice in any cause or matter.
Although, keeping in mind that the curative jurisdiction of the Supreme Court is limited to instances of abuse of process or gross miscarriage of justice, the Supreme Court, in this case, conducted a comprehensive merit-based review, re-evaluating evidence and the terms of the agreement between DMRC and DAMEPL. The Supreme Court focused on whether there was a miscarriage of justice due to the tribunal’s findings, thus conducting a detailed review contrary to the limited interference approach usually adopted in arbitration matters.
The DMRC decision underscores a significant departure from the Supreme Court’s previous stance promoting minimal judicial interference in arbitration, as seen in judgments like NN Global. This detailed review at the curative stage dilutes the court’s warning against using curative jurisdiction as a routine method to reopen cases, potentially impacting future arbitration practices and judicial approaches. The judgment has thus opened up new possibilities and perspectives for the development and evolution of arbitration law and jurisprudence in India and has invited a constructive and critical dialogue among the stakeholders of arbitration. It remains to be seen whether this verdict will lead to an influx of litigants seeking an additional ‘last bite’ of the cake as a matter of routine or if measures will be implemented to guarantee that the DMRC decision does not hinder India’s pro-arbitration trajectory.