Regarding the dispute over the Delhi Airport Express Line [Delhi Airport Metro Express Pvt Ltd v. Delhi Metro Rail Corporation Limited], the SC on Wednesday overturned a ₹2,800 crore arbitral award in favor of the Anil Ambani company, Delhi Airport Metro Express Pvt Ltd (DAMEPL), against the Delhi Metro Rail Corporation (DMRC).
Senior Advocates Mukul Rohatgi, Harish Salve, Kapil Sibal, JJ Bhatt, and Prateek Seksaria, with advocates Mahesh Agarwal, Rishi Agrawala, Shri Venkatesh, Megha Mehta Agarwal, Pranjit Bhattacharya, Madhavi Agarwal, Suhael Buttan, Vineet Kumar, Manisha Singh, Nishant Chothani and EC Agrawala appeared for the Delhi Airport Metro Express Private Limited.
Attorney General (AG) R Venkataramani, and Senior Advocates KK Venugopal, Parag Tripathi and Maninder Singh with advocates Tarun Johri, Ankur Gupta, Vishwajeet Tyagi, Srinivasan Ramaswamy, Chitvan Singhal, Ashita Chawla, Ankur Talwar, Arushi Mishra, Ameyavikrama Thanvi and Kartikey Aggarwal appeared for the Delhi Metro Rail Corporation.
SC Grants Curative Petition Filed by DMRC, Overturns Previous Ruling
A bench consisting of Chief Justice of India DY Chandrachud, Justices BR Gavai and Surya Kant granted the curative petition that DMRC had filed in opposition to a ruling rendered by the highest court in September 2021. The Delhi High Court Division Bench’s ruling in favor of DMRC was essentially upheld by the top court after it was overturned by the Supreme Court in September 2021.
“The request for a cure must be granted. It is back to where it was before the Division Bench of the High Court issued its order. The sums that DAMEPL, the petitioner, deposited will be reimbursed. The petitioner shall receive a refund of any money paid during coercive action, the court ruled. The Court made it clear that opening a floodgate with its curative jurisdiction was not appropriate.
SC Acknowledges Error in Interfering with High Court’s Decision, Upholds Anil Ambani Firm’s Arbitral Award
Nonetheless, the Court stated that the Supreme Court erred in interfering with the Division Bench order of the High Court that had set aside the arbitral award given the particular facts and circumstances of the case.
The Supreme Court declared, “Interference by the Supreme Court had resulted in grave miscarriage of justice.” The Anil Ambani firm’s ₹2,800 crore arbitral award was upheld by the Supreme Court in its 2021 ruling.
Reliance Infrastructure’s special purpose vehicle is called DAMEPL. The arbitration tribunal’s award, including interest, is valued at more than 46.6 billion rupees ($632 million), as per Reliance Infrastructure’s annual report.
The case concerns a Build-Operate-Transfer (BOT) concession agreement for Delhi Airport Express that was made in 2008 between DAMEPL and DMRC.
DAMEPL Terminates Contract with DMRC, Initiates Arbitration Proceedings
2012 saw DAMEPL end the contract, citing a number of structural flaws in the metro line that DMRC was supposed to have fixed even though DAMEPL had made notice of them.
DMRC requested to start arbitration by invoking an arbitration clause. The validity of the termination notice dated October 8, 2012 was the primary matter that came before the arbitral tribunal established under the terms of the concession agreement.
DMRC argued that since it had taken several actions to uphold its obligations under the concession agreement, the termination notice given by DAMEPL was unlawful. The DAMEPL was awarded damages by the Arbitral Tribunal in 2017, and DMRC was ordered to pay ₹2800 crore plus interest.
A Division Bench of the Delhi High Court reversed the award after it was upheld by a single judge in 2018. In an appeal, the Supreme Court upheld the award and reversed the High Court Division Bench ruling.
