DMRC verdict came in exceptional case where arbitration process was perverted: ABI President

Supreme Court’s decision to set aside an arbitral award in the case of Delhi Airport Metro Express Pvt Ltd v. Delhi Metro Rail Corporation Limited (DAMEPAL v. DMRC) came under exceptional circumstances and was unlikely to re-occur, Arbitration Bar of India (ABI) President Gourab Banerji recently observed. .Banerji noted that this decision arose in an exceptional case where the process of arbitration was perverted by the arbitral tribunal.“The DMRC judgment is not one which is easy to defend. The Supreme Court used the curative jurisdiction three years after the event to set aside what was the final judgment Supreme Court upholding an award … If you read the judgment, you will find the latter portion of the judgment makes it clear that the circumstances were extraordinary. It was, I quote "An exceptional case", where the process of arbitration was perverted by the arbitral tribunal to provide an undeserved windfall to a particular party,” he said.He also pointed out that this was a ruling that was passed in a domestic arbitration matter and was not applicable to international arbitration. He added that it need not be viewed as indicative of any bias in favour of a public sector enterprise.“The judgment itself says it was exceptional. Some people have perceived this to be a bias by our courts in favour of the Public Sector or public utilities. I don't think that was a motivation. We all know, actually why this happened ... So I don't think this is some calamity which sets us back ten years. Yes, it's a blip, but it's something we can live with. Curative jurisdiction can work positively as we've seen last year, and this is an exceptional case, and I don't think it's going to happen again,” Banerji said..The senior lawyer, who is also a Barrister at the Essex Court Chambers, was speaking at a panel discussion held in England on June 6 on the theme, “India – the International Perspective.” As part of London International Disputes Week, Stewarts hosted this panel discussion.The other participants at the discussion included Christopher Lau SC, Chartered Arbitrator and Barrister, Maxwell Chambers (Singapore) and 3 Verulam Buildings (London); Professor Dr. Nayla Comair-Obeid, Founding Partner, Obeid & Partners and Associate Member at 3 Verulam Buildings; Kevin Nash, Registrar, Singapore International Arbitration Centre (SIAC) and Chintan Chandrachud, Barrister, Brick Court Chambers. The discussion was moderated by Sherina Petit, Partner, Head of International Arbitration and Head of India Practice, Stewarts; Kamal Shah, Partner, Head of India and Africa Group, Stephenson Harwood and; Nishant Nath Singh, Senior Associate at Stewarts.Guest Speakers at the event included Vikas Mahendra, Co-founder, TERES & CORD and Partner, Keystone Partners; and Pallavi Saluja, Editor in Chief of Bar and Bench..The session flagged off with a demonstration of how the TERES software, fueled by Artificial Intelligence (AI) could be used in courtroom hearings as well as arbitration to roll out real-time transcripts of these proceedings with minimal margins of errors that could be ironed out with the aid of human oversight.Vikas Mahendra (TERES & CORD) spoke of how this software can be used not only for accurate transcriptions but also for translation and review of voluminous documents that are often a part of the arbitration process, while maintaining privacy and confidentiality..This was followed by a discussion on developments in the field of arbitration in India as well as abroad, such as in the Middle East and the MENA region.“The Middle Eastern countries and GCCs want to be seen as becoming value arbitration-friendly,” said Dr. Nayla Comair-Obeid (Founding Partner, Obeid & Partners).Among other comments, Prof. Comair-Obeid also emphasised that it is crucial for Bilateral Investment Protection Agreement (BITs) to conclude between India Arab countries.“There is no more BITs between India and Arab countries and specifically GCC. BIT is now being drafted between India and UAE, but we don't know what is the content of this BIT. In order to protect investors, it's very important to conclude these BITs between India, GCC countries and the Middle Eastern countries specifically because of the amount of trade that there will be between India and the Arab countries,” she said..Christopher Lau lauded the Indian Supreme Court’s decision to hold that arbitration agreements that are insufficiently stamped are not invalid from the get go and that such a defect could be cured.“The Supreme Court in the landmark judgment acted very quickly to correct an earlier erroneous judgment … This much-praised judgment has added much impetus to India's aspiration to be a global hub for International Arbitration,” he said..Kevin Nash spoke on how the SIAC remains an attractive option for Indian parties seeking to initiate arbitration proceedings. He noted that even when the SIAC’s rules were being revised, a large factor underlying the revisions was how it would work for Indian-seated arbitrations and Indian parties..Chintan Chandrachud was asked to comment on the challenges faced by Indian parties in foreign-seated arbitrations. Among other observations, he also touched upon why Indian parties are sometimes not willing to accept an arbitration settlement that may look good on paper.“I did a little bit of a snap survey at LIDW and I was asking lawyers that did work for State-owned entities, why that is the case. For the most part, the way it was explained to me was as follows. If the arbitral tribunal makes a decision and renders an award, then I, as the officer of a State-owned entity, am not responsible for it. It's no longer in my hands. If I accept a settlement or offer a settlement, then I also accept responsibility for the settlement. And that's a responsibility and a risk that I'm not willing to take, even if it means that there is a decent prospect that I lose in the ultimate arbitration. That's a mindset. There are no easy solutions. But I think what we need to change is the mindset to some extent as well as, of course, the kind of formal policies. Introduce policies that will make officers from State-owned entities is more comfortable with entering into settlements, particularly when appropriate,” he observed..As the discussion drew to a close, Pallavi Saluja (Editor in Chief, Bar and Bench) was invited to speak on the journalism trends in India. Saluja recounted how the story of Bar and Bench was linked to the growth of Indian digital media, and the work it has done over the years.“Through our work, we have given people an insight into what exactly happens in our courtrooms. And, of course, technology has revolutionized things and made it easier for all of us to report from courts across the country,” she observed.She also commented on the rise of arbitration in India, with arbitration lawyers increasing from a few hundred to thousands today.“The number of arbitration conferences that I must say, have gone up in India, and it is really hard to keep track, because every week, I would say there is an arbitration conference,” she added..Notably, Stewarts is also promoting an initiative to address the underrepresentation of Indian arbitrators appointed to international arbitration tribunals across the world, dubbed the India Promise.The goal of the India Promise is to encourage the consideration, appointment, and fair representation for Indians to sit as arbitrators in any international arbitration, regardless of it having an Indian connection.The idea of the India Promise was first outlined at the London Court of International Arbitration Symposium 2023 in Mumbai by Sherina Petit, Head of International Arbitration and Head of India Practice at Stewarts.