How invoking the Supreme Court's curative jurisdiction has festered the issue in DMRC v DAMEPL

One of the special jurisdictions of the Supreme Court of India that helps police itself is the curative jurisdiction. Curative petitions seeking the Court’s attention is a judicially created mechanism of the Court to ensure that an aggrieved person is entitled to relief against the final judgment or order of the Court after the dismissal of a review petition, in order to do complete justice as intended under Article 142 of the Constitution of India.

A Constitution Bench of the Supreme Court in Rupa Ashok Hurra v. Ashok Hurra held that in exercise of the inherent power vested in the Court, it may reconsider its own judgment to prevent abuses of process and to cure any gross miscarriage of justice, under exceptional circumstances. The ex debito justitiae grounds that entitle parties to seek relief under the curative jurisdiction of the Supreme Court are violation of principles of natural justice, including abuse of process and the existence of bias by the presiding judges.

Yet, the role of the curative became the centerfold last week when the Supreme Court in its wisdom (re)considered an arbitral award rendered in 2017, the enforcement of which remains pending as of today. At a time when the Central government has constituted an expert committee to amend the Arbitration and Conciliation Act, 1996 to reduce the burden on courts, the Supreme Court’s acceptance of the curative petition has indeed raised curiosities.

The petition to invoke the curative jurisdiction was filed by Delhi Metro Rail Corporation (DMRC) in August 2022 against the judgment of the Supreme Court delivered in September 2021, wherein the arbitral award of 2017 attained finality. The arbitration dispute relates to civil work in a public-private partnership project involving the construction, operation, and maintenance of the Delhi Airport Metro Express Rail project.

There were two issues of importance here. First is, whether the Court can seize curative jurisdiction over an arbitral award that was confirmed under Section 34 and was appealed under Section 37 of the Act, which appeal was later set aside after being heard by the Supreme Court under Article 136 of the Constitution, after which a further petition for review by the Court under Order 47 of the Code of Civil Procedure, 1908 was rejected for lack of error on the face of the record?

Arguably, the curative seems like an overreach by the Supreme Court, considering that the Arbitration Act clearly limits judicial scrutiny only to exceptional circumstances. Under the Act, when an arbitral award is confirmed by a Court under Section 34 (which provides for grounds on which an application to set aside an arbitral award), the appellate court’s jurisdiction is limited. That is, the proviso to Section 34(2A) of ACA provides that an arbitral award shall not be set aside by a court “by reappreciation of evidence,” thereby imposing a clear restriction on the appeals court’s scrutiny over the arbitral award.

In any case, the appeal decision was rejected as overreach by the Supreme Court on a special leave petition under Article 136 of the Constitution. Later, the Supreme Court rejected another opportunity to reconsider a review petition under Order 47(1) of the Code of Civil Procedure, 1908, for lack of proper grounds to reconsider the arbitral award. All of this history ought to limit the jurisdiction for a curative petition.

As such, in Bihar Legal Support Society v. Chief Justice of India, the Supreme Court held that discretionary powers under Article 136 is an extraordinary power reserved to address instances of grave miscarriage of justice and cannot be invoked merely in response to perceived injustice.

Further, the many appeals have exclusively disadvantaged one party by delaying the enforcement of the award. Reconsidering the issue using a curative petition creates a terrible precedent. Basically, a party losing an arbitral award can nevertheless delay enforcement and damage the winning party by going on filing appeals. That the Supreme Court would consider a curative after a special leave to appeal and a review petition to the Court is simply unconscionable.

Such overreach of its own jurisdiction by the Supreme Court seems exacerbated considering that the DMRC has not properly invoked any of the grounds on which a curative petition could be exercised, as laid down in the Hurra judgement. To the contrary, the petition seems like one more attempt by DMRC to delay the enforcement of the arbitral award, which alone is a violation of the early resolution objectives of the Arbitration Act. The years of undue delay from successive DMRC appeals on factual questions can result in the interest exceeding the principal amount by several crores. After all, the interest accumulated because of delayed enforcement comes at a cost to tax-payers, whom DMRC professes to serve through the metro rail project. In fact, the DMRC petition calling for the Supreme Court to exercise its curative jurisdiction seems outright vexatious, reeking of an attempt to reopen facts decided by arbitral tribunal and affirmed in appeal, repeatedly and successively.

It would have bode well – especially from the perspective of upholding the principles of natural justice - for the Supreme Court to summarily reject the curative and impose exemplary costs on the petitioner. The Court has the burden to exercise its jurisdiction cautiously and not in a manner that callously discourages investments and to the detriment of a public infrastructure project.

The first issue of seizing the curative jurisdiction should be understood in the background of the second issue, being procedural irregularities. DMRC’s petition was filed after a delay of more than eight months from the dismissal of the review petition by the Supreme Court on November 23, 2021 and without adequately explaining the cause for the delayed filing. Unexplained delays in filing the curative petition is violative of Rule 3 to Order XLVIII of the Supreme Court Rules, 2013. Moreover, the substantive grounds relied on in support of the petition do not meet the rigors of the Hurra decision. Neither of the two ex debito justitiae grounds – violation of the principles of natural justice or bias – have been enunciated in the petition. Indeed, DMRC would have needed an especially strong reason for the Supreme Court to justify the invocation of its inherent powers to interfere with an arbitral award that attained finality with the dismissal of the review petition earlier.

In fact, the principal argument relied on by DMRC relates to factual questions such as whether the finding of the arbitration tribunal that the agreement was validly terminated on account of “material adverse effect,” is incorrect because the defects pointed out by DAMEPL were not sufficiently significant. The issue of “material adverse effect” is purely a factual one and has already been adequately dealt with in an elaborate manner and based on a plethora of evidence by an arbitration tribunal composed of engineers. Other judicial decisions too have repeatedly held such issues as factual and falling outside the limited review jurisdiction of the Supreme Court even without considering the judicial restraint advocated under the Arbitration Act.

For instance, the Supreme Court in McDermott International Inc v. Burn Standard Co Ltd (2006) ruled that construction and interpretation of contracts is a matter for the arbitration tribunal to determine. Further, issues relating to breach of contract and quantum of damages are factual ones falling within the exclusive jurisdiction of the arbitral tribunal, as held in Olympus Superstructures Pvt Ltd v. Meena Vijay Khetan (1999). Furthermore, in Numaligarh Refinery Ltd. v. Daelim Industrial Co Ltd (2007), the apex court held that it cannot revisit findings of facts recorded by arbitrators. Moreover, in Madnani Construction Corporation Private Limited v. Union of India (2010), the Supreme Court emphasized that arbitral tribunals’ findings of facts are conclusive and that courts cannot interfere unless the evidence on the basis of which conclusion was reached is perverse. Most significantly, the Court in Mohd Arif alias Ashfaq v. Registrar, Supreme Court of India (2019) ruled that a curative petition cannot be used to review or re-appraise material available on record. As such, a curative petition is not an appeal to warrant reopening of settled questions of facts. Revisiting decided questions violates the principles of res judicata.

For the Supreme Court of India to indulge in DMRC’s request to invoke its curative jurisdiction over an arbitral award that has attained finality is an unwise move that lacks sufficient basis. At a time when the Government of India is seeking to make the arbitration process smoother and more efficient, it sets a bad precedent creating a loophole for all the arbitral awards to wind-up seeking curative review. It will also unduly create a set-back, preventing India from establishing a robust arbitration system for which timely resolution is the linchpin.

Srividhya Ragavan is a Professor of Law and the Director of India Programs at Texas A&M University School of Law.

Niraj Kumar Seth is a legal consultant based in New Delhi, India.