Why It Took So Long And Why Were There So Many Twists & Turns?
By A Special Correspondent
First publised on 2024-04-12 14:31:12
About the Author
What
happens when courts reverse earlier decisions, including an arbitral award,
multiple times? Ease of doing business and the confidence of companies in
policies and rule of law goes for a toss. Valuable time is lost and capital
remains blocked. This is what happened in the case between government-owned
public utility Delhi Metro Rail Corporation (DMRC) and Delhi Airport Metro
Express Private Limited (DAMEPL), a Reliance Infrastructure subsidiary owned by
Anil Ambani. In 2008, DAMEPL had entered into an agreement with DMRC to develop
the Airport Express line for the Delhi Metro. Due to some differences over curing
of defects, DAMEPL terminated the agreement, forcing DMRC to invoke the
arbitration clause in 2012. The arbitration panel voted in favour of DAMEPL in
2017. DMRC approached the Delhi HC which upheld the award. But on appeal, a
division bench of the same court set it aside. The matter reached the Supreme
Court and in 2021, the apex court reversed the Delhi HC division bench order to
uphold the arbitral award and ordered DMRC to pay Rs 2782.3cr plus interest
till the date of payment (which now stands at nearly Rs 8000cr) to DAMEPL. Now,
the Supreme Court has set aside its 2021 order and DMRC is not to pay anything
to DAMEPL.
In
reversing its earlier decision, the apex court was of the view that there was a "miscarriage of justice" in the earlier order and it "erred in interfering with
the decision of the Division Bench of the High Court". This, the court said,
had resulted in saddling a "public utility with an exorbitant liability". It
also said that the Delhi HC division bench was right in holding that the award
was "perverse, irrational and patently illegal" and had "overlooked crucial facts and evidence on record".
Although the latest order will be
music to the ears of the DMRC management and rights a blatant wrong which could
have resulted in a private company getting "undeserved windfall", the case holds many lessons for policy makers and regulators and even the judiciary. It took
too long to arrive at a closure - such cases should be decided faster and if
the courts are pressed for time, there is an urgent need for an independent
regulator for such cases.
