India’s attempt to project itself both as a country where it is easy to do business and as a hub of arbitration has received a jolt with the recent judgment of the Supreme Court (SC) in Delhi Metro Rail Corporation (DMRC) v Delhi Airport Metro Express Pvt. Ltd. (DAMEPL). The legal struggle that began in 2012 was thought to have been settled when the SC dismissed a review petition in 2021. It has now been exhumed through a curative judgment: An award delivered in 2017 has been set aside in the name of correcting the “miscarriage of justice” in the exercise of “curative jurisdiction” of the SC. To say the least, the judgment has sent disturbing signals down to national and international commercial and legal circles.
The Supreme Court. (ANI)
In the case of Rupa Hurra v Ashok Kumar (2002), the SC propounded the scope and ambit of curative power. Article 142 of the Constitution of India bestows curative jurisdiction upon the apex court. It is a wide power. But the greater the power, the more sparingly it should be used. In fact, it should be exercised only in the rarest of the rare cases: One, to prevent an abuse of the process of the court; and two, to cure “gross miscarriage of justice”. In order to establish these grounds, a party would have to prove either a violation of principles of natural justice, or bias of the judge, i.e. the judge’s close connection with the subject-matter, or with one of the parties to the lawsuit. These legal contours are well settled. The DMRC v DAMEPL judgment has upset the apple cart.
The commercial dispute between the DMRC and DAMEPL underwent different legal spheres — from the arbitral tribunal, which pronounced its award in 2017, of ₹8,000 crore in favour of DAMEPL, to the Single Bench of Delhi High Court (HC), which upheld the award in 2018, to the Division Bench of the HC, which set aside the award in 2019. Thereafter, from the Division Bench of the SC, which restored the award in 2021, to the dismissal of the review petition and confirmation of the award also in 2021, to a Full Bench of the SC, which has allowed the curative petition filed by DMRC and set aside the award recently. To say the least, the judgment has opened a Pandora’s Box.
First, the concept of “finality of judgment” has been jolted. If decisions can be flipped like this, when does a legal dispute come to rest? How long do litigants run to seek justice?
Second, the apex court has sieved through the evidence in detail. Such an exercise of judicial power has raised interesting legal questions. Whether in the exercise of curative jurisdiction, the court can critically examine the merits and demerits of the case or not. Whether by re-appreciating the evidence, the court has overstepped its curative jurisdiction or not. Despite its hope of not opening the floodgates to the curative petition, has the apex court let in a Trojan horse?
Third, the SC judgment may encourage judicial interference in arbitral cases. The more complicated the arbitral process becomes, the less it will be accepted. This judicial overdrive has scared the arbitral world. The judgment has destabilised the entire arbitral structure.
Fourth, ease of doing business demands a simple, speedy, effective, and efficient dispute resolution system. Investors instinctively dislike convoluted and flippant judicial processes. The judgment may convince foreign companies not to invest in India and persuade domestic companies not to go for public-private partnerships. For, the judiciary appears to be loaded on the side of the public sector undertaking. Such a judgment will have disastrous economic consequences.
Fifth, while the apex court has cloaked its reasoning under an attractive argument — not to reconsider the final judgment of dismissal of appeal and dismissal of review petition “would be oppressive to judicial conscience and cause the perpetuation of irremediable injustice” — there are several questions that arise. Would such needless interference not cause “perpetuation of irremediable injustice” to the thousands of litigants caught in the arbitral web? Wouldn’t such a “landmark judgment” be oppressive to judicial conscience? Such judgments justify what the authors of Court on Trial: A Data-Driven Account of the Supreme Court of India have said: The SC gives people easy access to the apex court, but not to justice.
Sixth, the SC has cast the die against the arbitration process. Since Rome has spoken, it will take years to wash away the stain. The judgment will continue to tax the legal imagination for many years.
And seventh, while dealing with the curative petition filed in the case of the Bhopal gas tragedy, the apex court dismissed it. Yet, while dealing with a curative petition filed by a State-owned company, the court ruled in favour of it. The judgment lends credence to the growing popular image of the SC not as a court of law and justice but as an executive court. Such misplaced views can weaken the faith of the people in the judicial process.
RS Chauhan is former Chief Justice of Telangana and Uttarakhand high courts. The views expressed are personal
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