Supreme Court chides AG how India could become global hub if arbitration awards were not enforced

Supreme Court chides AG how India could become global hub if arbitration awards were not enforced

The matter pertained to a dispute between Delhi Airport Metro Express and Delhi Metro

The Supreme Court has observed that India cannot aspire to be an international arbitration hub if there is no enforcement of arbitration awards.

A bench comprising Justice BR Gavai and Justice Vikram Nath was considering a petition filed by the Delhi Airport Metro Express Pvt Ltd (DAMEPL) related to the enforcement of the award worth Rs.7200 crores passed in its favor against the Delhi Metro Rail Corporation (DMRC).

Appearing for DAMEPL senior advocate Harish Salve informed the bench that about Rs.4500 crores remain unpaid.

Justice Gavai then told the Attorney General of India R Venkataramani, "On the one hand there are public speeches about making India an international arbitration hub, and then there is no enforcement of an award!"

He pointed out that the apex court had upheld the award and not following it would amount to contempt of court. Addressing the AG further, Justice Gavai stated, "If you really want India to be an international arbitration hub, then it has to start from you."

While the AG requested four weeks' time, the bench granted a couple of days.

The court is hearing a petition filed by DAMEPL seeking enforcement of the May 2017 arbitration award. In 2008, DMRC had signed a contract with DAMEPL related to the design, installation, commissioning, operation, and maintenance of the line.

However, due to certain disputes, in 2012, the matter went into arbitration. DMRC invoked the arbitration after DAMEPL terminated the agreement. Last year, the Supreme Court upheld the award in favor of DAMEPL

DMRC stated that in 2006 it owed Rs.7,010.08 crore to the Reliance subsidiary. It had already paid Rs.2,599.17 crore to DAMEPL and had sought Rs 3500 crore each from the Central and Delhi governments.

Meanwhile, DAMEPL filed an execution petition in the Delhi High Court to enforce the award.

In October last, the AG informed the high court that since the equity partners were contemplating the matter, it would be good if no adverse order was passed by the court on the maintenance and operations of Delhi Metro.

DMRC also stated that if any adverse order was passed against the company at that stage, its operations would come to a complete standstill. It would be prejudicial to the public interest considering approximately 48 lakh journeys took place daily.