SC permits DMRC’s appeal against arbitral award in favour of DAMEPL

In a significant verdict, the Supreme Court overturned the decision in favour of Delhi Airport Metro Express Pvt Ltd (DAMEPL) and ordered the execution proceedings to be discontinued. The arbitral award, which had upheld in 2017, was challenged by Delhi Metro Rail Corporation (DMRC) through a curative plea.

The bench, led by CJI D.Y. Chandrachud, stated, “The orders passed by the High Court in the course of the execution proceedings for enforcing the arbitral award are set aside.” This decision comes after a three-member arbitral tribunal’s unanimous award in favour of DAMEPL, claiming operational viability issues on the airport line.

The apex court highlighted that there was evidence indicating the line was operational, contradicting the tribunal’s findings. It also mentioned the tribunal’s disregard for key terms of the termination clause and CMRS sanction, leading to perversity and illegality in the arbitral award.

The Division Bench of the High Court correctly intervened, citing perversity and patent illegality in the tribunal’s decision. The dispute between DMRC and DAMEPL arose in 2008 when DAMEPL stopped operating the metro line due to alleged contract violations and sought a termination fee through arbitration.