A) Abstract / Headnote

This case revolves around a dispute between Delhi Metro Rail Corporation Ltd. (DMRC) and Delhi Airport Metro Express Pvt. Ltd. (DAMEPL), arising out of the Concession Agreement of 2008. The Concession Agreement entailed DAMEPL’s responsibility for the design, operation, and maintenance of the metro system, while DMRC managed civil construction. Following operational defects and safety concerns, DAMEPL terminated the agreement, leading to arbitration. The award favored DAMEPL, recognizing material breaches by DMRC. Successive appeals and judicial reviews questioned the legal propriety of arbitral findings, including their validity under the Arbitration and Conciliation Act, 1996, focusing on the grounds of patent illegality. The judgment provides critical insights into curative petitions under Article 142 of the Indian Constitution and the limits of judicial interference with arbitral awards.

Keywords: Arbitration, Curative Petition, Patent Illegality, Metro Operations, Judicial Review.

B) Case Details

i. Judgment Cause Title:
Delhi Metro Rail Corporation Ltd. v. Delhi Airport Metro Express Pvt. Ltd.

ii. Case Number:
Curative Petition (C) Nos. 108-109 of 2022 in Review Petition (C) Nos. 1158-1159 of 2021 in Civil Appeal Nos. 5627-5628 of 2021.

iii. Judgment Date:
April 10, 2024.

iv. Court:
Supreme Court of India.

v. Quorum:
Dr. Dhananjaya Y Chandrachud, B.R. Gavai, Surya Kant, JJ.

vi. Author:
Dr. Dhananjaya Y Chandrachud, CJI.

vii. Citation:
[2024] 4 S.C.R. 473; 2024 INSC 292.

viii. Legal Provisions Involved:

• Arbitration and Conciliation Act, 1996, Sections 34 and 37.
• Metro Railways (Operation and Maintenance) Act, 2002.
• Article 136 and Article 142 of the Indian Constitution.

ix. Judgments Overruled by the Case (if any):
Not applicable.

x. Case Related to Which Law Subjects:
Arbitration Law, Contract Law, Public Infrastructure Disputes, Constitutional Law.

C) Introduction and Background of the Judgment

The dispute originated from the 2008 Concession Agreement between DMRC and DAMEPL, a consortium led by Reliance Infrastructure. Under this agreement, DAMEPL undertook to manage and operate the Delhi Airport Metro Express Line. Disputes arose in 2012 over structural defects, leading DAMEPL to terminate the agreement, citing breaches and safety risks. The arbitration tribunal ruled in favor of DAMEPL, awarding them termination payments and damages. Judicial scrutiny focused on whether the arbitral award suffered from patent illegality and whether subsequent judgments respected the doctrine of minimal interference in arbitration.

D) Facts of the Case

1. Formation of Agreement:
   In 2008, DMRC and DAMEPL entered into a Concession Agreement. DMRC undertook civil works, while DAMEPL was responsible for metro operations until 2038.

2. Emergence of Defects:
   In 2012, DAMEPL raised concerns about structural cracks and safety, alleging material breaches by DMRC. These defects allegedly impacted DAMEPL’s obligations under the agreement.

3. Termination and Arbitration:
   DAMEPL served a cure notice in July 2012, seeking rectifications within 90 days. Dissatisfied with DMRC’s response, DAMEPL terminated the agreement and initiated arbitration.

4. Arbitral Award:
   The tribunal ruled in favor of DAMEPL, finding that DMRC had failed to cure the defects or take effective remedial steps.

5. Judicial Reviews:

• The Single Judge of the Delhi High Court upheld the award under Section 34.
• The Division Bench partly overturned it, declaring the award patently illegal.
• The Supreme Court (two-judge bench) reinstated the award in 2021, leading to the present curative petition.

E) Legal Issues Raised

1. Maintainability of the Curative Petition:
   Whether the curative jurisdiction of the Supreme Court can be invoked to address alleged miscarriages of justice post-review.

2. Patent Illegality in Arbitral Award:
   Whether the tribunal’s findings, particularly on curing defects and interpreting contractual clauses, constituted patent illegality.

3. Role of CMRS Certification:
   The relevance of safety certifications issued by the Commissioner of Metro Railway Safety (CMRS) in assessing the validity of the termination.

F) Petitioner/Appellant’s Arguments

1. Defects and Material Adverse Effect:
   The defects did not render the metro line unviable, and the CMRS certification attested to its operational safety.

2. Effective Remedial Steps:
   DMRC initiated prompt repairs after receiving the cure notice, fulfilling its contractual obligations.

3. Patent Illegality Misjudged:
   The Division Bench erred in treating the tribunal’s award as perverse, ignoring the limited scope of judicial review.

4. CMRS Certificate Binding:
   The CMRS certification conclusively demonstrated safety compliance, invalidating DAMEPL’s grounds for termination.

G) Respondent’s Arguments

1. Termination Justified:
   DMRC’s failure to cure defects within the specified period constituted a breach, warranting termination under the agreement.

2. Role of CMRS Certificate:
   The tribunal was the sole judge of the evidence, and the CMRS certificate did not negate the breaches established.

3. Non-Maintainability of Curative Petition:
   Curative jurisdiction should not serve as a re-evaluation forum for settled judgments.

4. Financial Damages:
   DAMEPL incurred substantial losses, justifying compensation awarded by the tribunal.

H) Judgment

a) Ratio Decidendi

The Supreme Court invoked curative jurisdiction to rectify the miscarriage of justice. It held that the tribunal ignored vital evidence, including the CMRS certification, and misinterpreted the agreement’s termination clause, leading to a patently illegal award.

b) Obiter Dicta

The judgment reiterated the importance of curative jurisdiction in safeguarding justice while emphasizing the limits of judicial interference in arbitration.

c) Guidelines (If Any)

1. Effective Steps under Cure Period:
   Incremental progress toward curing defects must be considered under arbitration agreements.
2. Judicial Review Standards:
   Courts should defer to tribunal findings unless perverse or irrational.
3. Role of Statutory Certifications:
   Statutory safety certifications must be treated as vital evidence in disputes involving public infrastructure.

I) Conclusion & Comments

The judgment underscores the delicate balance between respecting arbitral autonomy and correcting miscarriages of justice. It reinforces the primacy of curative jurisdiction while cautioning against routine interference with arbitral awards.

J) References

1. Rupa Hurra v. Ashok Hurra [2002] 2 SCR 1006.
2. Associate Builders v. DDA [2015] 3 SCC 49.
3. Ssangyong Engineering v. NHAI [2019] 15 SCC 131.
4. Metro Railways (Operation and Maintenance) Act, 2002.
5. Arbitration and Conciliation Act, 1996.