Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation Ltd.
Background
DMRC (a Delhi government/central government joint venture) engaged DAMEPL as a private concessionaire to build and operate the Delhi Airport Metro Express Line. After the line became operational, DAMEPL found safety-related structural defects (cracked/sunk viaduct bearings) and, after DMRC allegedly failed to cure them within the contractually agreed period, DAMEPL terminated the concession agreement. An arbitral tribunal ruled substantially in DAMEPL's favour, including on the amount of termination compensation owed by DMRC, but the Delhi High Court's Division Bench partly overturned the tribunal's award on appeal.
Decision Breakdown
The Supreme Court held that the High Court, in exercising its limited supervisory jurisdiction under Section 34 (as examined in appeal under Section 37), had overstepped its bounds by re-appreciating the merits of the arbitral tribunal's findings as if sitting in ordinary appeal. The Court reaffirmed that courts can interfere with an arbitral award only on narrow grounds such as patent illegality or conflict with public policy, not merely because they would have decided differently on the evidence. It restored the arbitral tribunal's award in DAMEPL's favour on the validity of the termination and the computation of termination payment, also upholding the tribunal's findings that DAMEPL had not waived its termination right and was entitled to the awarded interest. DAMEPL's appeal was allowed and DMRC's cross-appeal was dismissed.
Lesson Learnt
When parties choose arbitration to resolve commercial disputes, courts will respect that choice by intervening only in very limited circumstances: a party cannot use a court appeal to re-argue the facts of a case it lost before an arbitrator, which protects the finality and purpose of the arbitration process.