Alternative Dispute Resolution

Delhi Metro Rail Corporation Ltd. v. Delhi Airport Metro Express Pvt. Ltd.

(2024) 5 SCC 197; 2024 INSC 292

Citation: (2024) 5 SCC 197; 2024 INSC 292
Court: Supreme Court of India
Date: 10 April 2024
Bench: D.Y. Chandrachud, C.J.; B.R. Gavai and Surya Kant, JJ.

Facts

DMRC granted DAMEPL a concession to design, operate and maintain the Delhi Airport Metro Express Line.
Serious defects appeared in the civil structure, including bearings and other components.
DAMEPL issued a cure notice and later terminated the concession agreement.
DMRC maintained that:
the defects were repairable;
substantial corrective work had been completed;
and termination was invalid.
The tribunal upheld DAMEPL’s termination and awarded a large termination payment with interest.
A Single Judge upheld the award.
A Division Bench partly set it aside.
In 2021, the Supreme Court restored the award.
DMRC’s review petitions failed.
It then filed curative petitions, contending that the earlier Supreme Court decision had resulted in a fundamental miscarriage of justice.
In 2024, the Supreme Court reconsidered the case through its extraordinary curative jurisdiction.

Issue

Whether the award suffered from patent illegality.
Whether the tribunal ignored vital contractual and technical evidence.
Whether the exceptional curative jurisdiction could be used in an arbitration dispute.
Whether the Court was impermissibly reassessing the merits.

Rule

Curative jurisdiction is much narrower than:
Section 34;
Section 37;
appeal;
or ordinary review.
It may be exercised only to prevent a grave miscarriage of justice and preserve the integrity of the judicial process.
An award may be patently illegal where the tribunal:
ignores vital evidence;
disregards an express contractual requirement;
adopts a conclusion not reasonably possible;
or fails to address the contractual cure mechanism.
Nevertheless, curative jurisdiction cannot become a routine third or fourth level of arbitral review.

Application

The Court examined whether the tribunal had properly addressed the contractual standard for termination.
The agreement required assessment of:
the nature of defects;
whether they were cured within the specified period;
the safety certification process;
and the effect of corrective measures.
The Court concluded that the tribunal had:
ignored material evidence showing substantial rectification;
failed to apply the contractual cure requirements;
treated technical concerns as automatically justifying termination;
and reached conclusions inconsistent with the record.
The 2021 Supreme Court judgment had restored the award without adequately identifying these defects.
According to the curative Bench, that restoration placed an enormous liability upon a public utility on the basis of a fundamentally flawed award.
It therefore found a rare miscarriage of justice sufficient to reopen the final Supreme Court decision.
The Court stressed that its intervention was not based merely on another possible interpretation.
It considered the award to be one that no reasonable tribunal could have made after applying the contract and vital evidence.
The decision has attracted concern because curative intervention may appear inconsistent with arbitral finality.
The Court itself therefore emphasised that:
the remedy is extraordinary;
public-sector involvement or the size of an award is not enough;
and ordinary disagreements must end under Sections 34 and 37.
The judgment should not be treated as creating a routine curative appeal against awards.

Conclusion

The Supreme Court allowed DMRC’s curative petitions.
It set aside the earlier Supreme Court judgment and the arbitral award.
It held that the tribunal’s disregard of vital evidence and the cure provisions produced patent illegality and a grave miscarriage of justice.
Use this case for: the exceptionally rare curative correction of an award-related Supreme Court judgment.