Delhi Metro Not Liable To Pay Rs 8-K Cr To Anil Ambani's DAMEPL As SC Strikes Down Its Own 2021 Verdict

The Supreme Court overturned a verdict passed by it in 2021 that upheld an arbitral award of around Rs 8000 crores won by the Delhi Airport Metro Express Private Limited against the Delhi Metro

The Supreme Court on Wednesday overturned a verdict passed by it in 2021 that upheld an arbitral award of around Rs 8000 crores won by the Delhi Airport Metro Express Private Limited (DAMEPL, Reliance Infrastructure subsidiary) against the Delhi Metro Rail Corporation (DMRC). The court observed that by setting aside the High Court judgment and ruling in favour of DAMEPL, this Court restored a patently illegal award which saddled a public utility with an exorbitant liability. 

The apex court ruled called it a ‘grave miscarriage of justice’ where the process of arbitration has been perverted by the arbitral tribunal to provide an undeserved windfall to DAMEPL.

The DMRC had moved a curative plea against the Supreme Court verdict. The bench led by CJI DY Chandrachud today allowed a curative petition and held that the Supreme Court judgment passed in 2021 was wrong in setting aside the Delhi High Court's verdict which had rejected the arbitral award passed against DMRC.

This CJI called it a "great miscarriage of justice" and said that it warrants the exercise of curative jurisdiction of Supreme Court under Article 142 of the Constitution.

This case pertains to the non-payment of termination fees by the Delhi Metro to DAMEPL, owned by Anil Ambani's Reliance Infrastructure Limited, despite terminating a contract for running the airport metro line before the expiry of the contract period.

The Delhi Metro has been utilising the project assets constructed by DAMEPL as well as the project revenues since July 2013.

In 2017, a tribunal ruled in favour of DAMEPL and awarded a sum total of Rs. 2782.33 crores with interest to Ambani's firm.

DMRC's challenged the tribunal award in Delhi High Court. At first, DMRC's plea was dismissed by a single-Judge Bench of the Delhi High Court in March 2018. However, it succeeded in the Letters Patent Appeal.

DAMEPL then moved the Supreme Court for a final say on the matter. The Supreme Court in 2021 ruled in favour of DAMEPL. However, the today (On April 10), the top court reversed its own judgment and granted relief to Delhi Metro.

The top court today ruled "...this Court erred in interfering with the decision of the Division Bench of the High Court. The judgment of the Division Bench in the appeal under Section 37 of the Arbitration and Conciliation Act 1996 was based on a correct application of the test under Section 34 of the Act."

The CJI further noted that 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.

"There was no valid basis for this Court to interfere under Article 136 of the Constitution. The interference by this Court has resulted in restoring a patently illegal award. This has caused a grave miscarriage of justice. We have applied the standard of a ‘grave miscarriage of justice’ in the exceptional circumstances of this case where the process of arbitration has been perverted by the arbitral tribunal to provide an undeserved windfall to DAMEPL," the order read.