In a huge relief to the Delhi Metro Rail Corporation (DMRC), the Supreme Court on Wednesday reversed its September 2021 judgment and set aside the 2017 arbitral tribunal award that had ruled in favour of Anil Ambani firm – Delhi Airport Metro
Express Private Limited – and had directed the DMRC to pay an exorbitant amount running into a few thousand crores.

Holding that the “Division Bench applied the correct test in holding that the arbitral award suffered from the vice of perversity and patent illegality”, a bench of Chief JusticeDY Chandrachud, Justice BR Gavai and Justice Surya Kant, in a judgment today said that the September 2021 judgment of the Supreme Court interfering with the 2019 High Court judgment “resulted in a miscarriage of justice.”

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“In the specific facts and circumstances of this case … we have come to the conclusion that this Court erred in interfering with the decision of the Division Bench of the High Court”

“The judgment of the Division Bench provided more than adequate reasons to come to the conclusion that the arbitral award suffered from perversity and patent illegality” and there was no valid basis for the Supreme Court to interfere with it under Article 136 of the Constitution.

Holding that the findings of the Division Bench (Two Judge) were “borne out from the record and were not based on a misappreciation of law or fact,” the top court today said, “This Court failed, … to justify its interference with the well-considered decision of the Division Bench of the High Court.”

Speaking for the bench, Chief Justice Chandrachud said, “By setting aside the (2019) judgement of the Division Bench, this Court (in September 2021) restored a patently illegal award which saddled a public utility with an exorbitant liability. This has caused a grave miscarriage of justice …”

Setting aside the 2017 arbitral tribunal award, and restoring the parties to the 2019 position when the judgment of the Division Bench of the High Court was pronounced, the court directed the discontinuation of the execution proceedings before the High Court for enforcing the arbitral award.

Directing the refund of the amount deposited by the DMRC pursuant to its 2021 judgment, the top court today directed that the part of the awarded amount, if any, paid by the DMRC as a result of “coercive action is liable to be restored in favour of the petitioner (DMRC).”

The top court also set aside the orders passed by the High Court in the course of the execution proceedings for enforcing the arbitral award.

In a clarification, the Supreme Court today said, “we clarify that the exercise of the curative jurisdiction of this Court should not be adopted as a matter of ordinary course. The curative jurisdiction should not be used to open the floodgates and create a fourth or fifth stage of court intervention in an arbitral award, under this Court’s review jurisdiction or curative jurisdiction, respectively.”

The arbitral tribunal award was upheld by a single judge bench of Delhi High Court in 2018, but it was struck down by a Division Bench of the High Court in 2019.

Reliance Infra approached the Supreme Court against the High Court’s Division Bench decision striking down the award. A two-judge bench of SC in 2021 reversed the High Court judgment by the Division Bench and restored the arbitral tribunal award. The DMRC’s plea seeking review of the September 2021 judgment too was dismissed in November 2021.

Thereafter in 2022 DMRC moved a Curative petition questioning the September 2021 judgment on the point of law.