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Delhi airport metro: Supreme Court sets aside Rs 8000 crore arbitral award in favour of DAMEPL

The Supreme Court on Wednesday set aside a Rs 8000 crore arbitral award in favour of the Delhi Airport Metro Express Private Limited (DAMEPL) against the Delhi Metro Rail Corporation (DMRC) in connection to the dispute over Delhi Airport Express Line. 

A bench comprising Chief Justice of India DY Chandrachud, Justice BR Gavai and Justice Surya Kant allowed the curative plea lodged by DMRC against a September 2021 judgment of the apex court. The Supreme Court restored a judgment passed by a Division Bench of the Delhi High Court which had ruled in favour of DMRC before the apex court had set aside the same in September 2021.

The court ordered that the curative plea must be and is allowed, adding that it is restored to the position when the Division Bench of High Court order was passed. It mentioned that the amounts deposited by the petitioner (DAMEPL) shall be refunded and any amount paid by petitioner as part of coercive action has to be refunded.

Furthermore, the Court clarified that its curative jurisdiction should not be used to open floodgates. In certain facts and circumstances of the case, the court stated that the Supreme Court erred in interfering with the Division Bench order of the High Court which had set aside the arbitral award. It asserted that the interference of the top court had led to grave miscarriage of justice.

The matter relates to a 2008 concession agreement between DAMEPL and DMRC for Delhi Airport Express on a Build–operate–transfer (BOT) basis. Notably, the DAMEPL terminated the agreement in 2012 mentioning several structural defects in the metro line which were allegedly not cured by DMRC despite being pointed out by DAMEPL.

The DMRC invoked an arbitration clause seeking to initiate arbitration. The major issue that arose for determination before the arbitral tribunal constituted under the concession agreement was the validity of the termination notice dated October 8, 2012.

The Delhi Metro claimed that the termination notice issued by DAMEPL is illegal, as DMRC had taken various steps for honouring its obligations under the concession agreement. Earlier in 2017, the Arbitral Tribunal awarded damages to the DAMEPL and directed DMRC to pay RS 8000 crore.

Later in 2018, a single-judge of the Delhi High Court upheld the award but the same was overturned by a Division Bench on appeal. The apex court in appeal overturned the High Court Division Bench judgment and restored the award. Furthermore, a review petition against the same was dismissed leading to the instant plea.

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