NEW DELHI: Two days after Supreme Court judge Justice Ujjal Bhuiyan publicly described the Supreme Court’s April 2024 remedial award in the Delhi Metro Rail Corporation (DMRC)-Delhi Airport Metro Express Ltd (DAMEPL) dispute as having caused the “most detriment to arbitration in India”, Chief Justice of India Surya Kant on Tuesday expressed surprise that DAMEPL, a subsidiary of Reliance Infrastructure, appears to have support from “public platforms” despite… From its presence the case was lost.
“The judgment debtor appears to be very influential. He seems to be getting supporters. We never thought he is so influential that statements are being made from public platforms in support of the party that lost,” the Chief Justice commented while hearing a contempt petition filed by DMRC against DAMEPL for alleged non-compliance with the court’s April 10, 2024 judgment ordering recovery of money received under the arbitration award.
The bench, also comprising Justices Joymalia Bagchi and Vipul M Pancholi, adjourned the case for four weeks.
While the Chief Justice did not name anyone nor refer to any specific statement, the remarks assume significance as they came just two days after Justice Bhuyan spoke at a public event on arbitration reforms, singling out the April 2024 remedial award as a decision that severely undermined India’s arbitration framework.
Justice Bhuiyan said that the Supreme Court, while exercising its remedial jurisdiction, effectively reopened the dispute for a “fifth round of appeal” after the arbitral award had already survived scrutiny before the arbitral tribunal, the Delhi High Court, the Supreme Court under Article 136 and even review proceedings.
“In remedial jurisdiction, the Supreme Court conducted a detailed review of the merits…effectively the fifth round of challenge to the arbitral award,” Justice Bhuiyan observed, adding that although the judgment cautioned against creating additional stages of judicial interference in arbitral awards, “the bench did exactly the opposite.”
Calling it a decision that caused “broader harm to arbitration in India”, Justice Bhuiyan warned that this ruling, along with subsequent policy decisions of the Union Finance Ministry discouraging arbitration of high-value government contracts, had weakened investor confidence and hampered India’s ambition to emerge as a global hub for arbitration.
The proceedings before the CJI-led bench on Tuesday arose out of a contempt petition filed by the DMRC alleging that DAMEPL had failed to comply with the apex court’s April 10, 2024 curative award, which set aside the 2017 arbitration award in favor of the Reliance Infrastructure subsidiary.
The remedial panel, which then comprised CJI DY Chandrachud and Justices BR Gavai and Surya Kant, set aside the arbitration award after finding that the court had ignored vital evidence, including an affidavit issued by the Metro Rail Safety Commissioner, and held that the Delhi High Court was justified in calling the award “manifestly illegal”. The judgment overturned the position taken by the High Court in September 2021 and again in review proceedings in November 2021, when the DMRC’s appeal to the judgment failed, resulting in a liability of approx. $8000 Crores.
After the remedial ruling, Reliance Infrastructure publicly stated that it had not received any payment from DMRC. However, the same Supreme Court judgment recorded the application made on behalf of DAMEPL which DMRC had already paid $2,599.18 crores and this is a balance $An amount of Rs 5,088 crore remained outstanding till January 31, 2024. Relying on these figures, the DMRC later initiated contempt proceedings to recover the amount already paid plus interest.
The latest hearing also assumes significance as the ICJ-led court is separately monitoring the investigations by the Central Bureau of Investigation and Enforcement Directorate into alleged financial irregularities involving Anil Dhirubhai Ambani group companies. In those proceedings, the court was informed of allegations relating to the settlement of a company’s debts $Rs 2,983 crore $26 lakh crore through insolvency proceedings and alleged loan default $Rs 40,000 crore linked to Reliance Communications and its associated entities.
