'Appears to be too influential': CJI Surya Kant questions support for DAMEPL despite SC defeat

Chief Justice of India questioned public support for DAMEPL despite its loss in the DMRC arbitration dispute, as the Supreme Court heard a contempt plea.

Two days after Supreme Court judge Justice Ujjal Bhuyan publicly described the apex court’s April 2024 curative judgment in the Delhi Metro Rail Corporation (DMRC)-Delhi Airport Metro Express Pvt Ltd (DAMEPL) dispute as having caused “the most extensive damage to arbitration in India”, Chief Justice of India Surya Kant on Tuesday expressed surprise that DAMEPL, a subsidiary of Reliance Infrastructure appeared to enjoy support from “public platforms” despite having lost the case.

The CJI questioned public support for DAMEPL despite its loss in the Supreme Court in the DMRC arbitration dispute. (Naveen Sharma/ANI Photo)

CJI questions public support for DAMEPL

“The judgment debtor appears to be too influential. He seems to get supporters. We never thought he is so influential that from public platforms statements are being made in support of the party who lost,” remarked the Chief Justice while hearing a contempt petition filed by DMRC against DAMEPL for alleged non-compliance with the court’s April 10, 2024, judgment directing refund of monies received under the arbitral award.

The bench, also comprising Justices Joymalya Bagchi and Vipul M Pancholi, adjourned the matter by four weeks.

While the Chief Justice neither named anyone nor referred to any specific statement, the remarks came barely two days after Justice Bhuyan, speaking at a public event on arbitration reforms, singled out the April 2024 curative verdict as a decision that had severely undermined arbitration framework.

Justice Bhuyan had said the Supreme Court, while exercising its curative jurisdiction, effectively reopened the dispute for a “fifth round of challenge” 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 curative jurisdiction, Supreme Court undertook a detailed review of the merits... effectively the fifth round of challenge to the award,” Justice Bhuyan observed, adding that although the judgment cautioned against creating additional stages of judicial intervention in arbitral awards, “the bench did just the opposite.”

Calling it the decision that caused “the most extensive damage to arbitration in India”, Justice Bhuyan warned that the ruling, coupled with subsequent policy decisions of the Union finance ministry discouraging arbitration in high-value government contracts, had weakened investor confidence and impeded India’s ambition of emerging as a global arbitration hub.

DMRC alleges non-compliance with SC order

The proceedings before the CJI-led bench on Tuesday arose out of a contempt petition filed by DMRC alleging that DAMEPL failed to comply with the Supreme Court’s April 10, 2024, curative judgment, which overturned a 2017 arbitral award in favour of the Reliance Infrastructure subsidiary.

The curative bench, which comprised then CJI DY Chandrachud and justices BR Gavai and Surya Kant, set aside the arbitral award after finding that the tribunal ignored vital evidence, including a certificate issued by the Commissioner of Metro Railway Safety, and held that the Delhi High Court was justified in characterising the award as “patently illegal”. The judgment reversed the Supreme Court’s position of September 2021 and again in review proceedings in November 2021, when DMRC’s challenge to the award had failed, resulting in a liability of nearly ₹8,000 crore.

Following the curative verdict, Reliance Infrastructure publicly stated that it had not received any payment from DMRC. However, the Supreme Court judgment itself recorded the submission made on behalf of DAMEPL that DMRC had already paid ₹2,599.18 crore and that a balance of ₹5,088 crore remained outstanding as of January 31, 2024. Relying on those figures, DMRC subsequently initiated contempt proceedings seeking refund of the amount already paid along with interest.

Separate probe into Reliance Group entities

The CJI-led bench is separately monitoring investigations by the Central Bureau of Investigation and the Enforcement Directorate into alleged financial irregularities involving companies of the Anil Dhirubhai Ambani Group. The court has been informed of allegations concerning settlement of debts of ₹2,983 crore for ₹26 crore through insolvency proceedings and alleged loan defaults exceeding ₹40,000 crore linked to Reliance Communications and associated entities.