Summary of the Supreme Court Judgement (Delhi Metro Rail Corporation Ltd. vs Delhi Airport Metro Express Pvt. Ltd., 2024 INSC 292):
This landmark Supreme Court judgement resolves a prolonged legal battle between Delhi Metro Rail Corporation Ltd. (DMRC) and Delhi Airport Metro Express Pvt. Ltd. (DAMEPL) regarding the operation and maintenance of the Delhi Airport Metro Express Line (AMEL). The dispute stemmed from alleged defects in the metro line’s construction and subsequent safety concerns.
Key Points:
- Parties and Background: DMRC, a government-owned entity, and DAMEPL, a special-purpose vehicle of a consortium, entered into a public-private partnership for AMEL in 2008. DAMEPL was to handle certain operations, including system installation and maintenance, while DMRC was responsible for land acquisition and civil structures.
- Dispute Origin: DAMEPL, citing safety issues due to construction defects, halted operations in 2012 and eventually terminated the contract. DMRC contested this termination and initiated arbitration proceedings.
- Arbitration and Court Proceedings: An arbitral tribunal ruled in favor of DAMEPL, leading DMRC to challenge the award in the Delhi High Court. The High Court upheld the tribunal’s decision, but a Division Bench partly set aside the award, finding it to be patently illegal and perverse. The Supreme Court, on appeal, restored the arbitral award but was later challenged in a curative petition.
- Supreme Court’s Ruling: The Supreme Court, in its judgement, reversed its earlier decision and sided with the Division Bench of the High Court, finding the arbitral award to be patently illegal and perverse. The Court noted that the award failed to consider vital evidence, like the CMRS certification, and misunderstood the terms of the termination clause.
- Impact on DMRC and DAMEPL: The Supreme Court’s final ruling discontinued the execution proceedings for enforcing the arbitral award, resulting in a significant financial impact on both DMRC and DAMEPL.
- Broader Implications: The judgement emphasizes the limits of arbitral tribunals and the careful scrutiny required by courts in upholding arbitration awards, particularly regarding public-private partnerships and large infrastructural projects.
Delhi Metro Rail Corporation Ltd. …Petitioner
Versus
Delhi Airport Metro Express Pvt. Ltd. …Respondent