In April 2024, the apex court of India overturned an arbitral award in a case involving the Delhi Metro Rail Corporation and a private Delhi-based company that was party to an agreement signed over a decade ago. The DMRC had initiated arbitration proceedings seeking to quash the notice of termination of the contract when the company raised the matter of civil contract works defects in 2012. In abidance with the provision of Article 142 of our constitution, the court exercised curative jurisdiction in this case, marking the first instance to do so in an arbitral dispute.

This raised the eyebrows of those who had expressed the need for a lesser role played by courts in arbitration matters, considering the existing interdependent relation between the court's assistance and the proceedings of arbitration before the arbitral tribunal, a statutory set-up authority. It has also cast doubts on the legal coherence of the arbitral award albeit passed duly by law, as it was examined for its judicial rationale after apparently reviving it through a petition, taking nearly 11 years to do so.

This post explains the underpinnings of curative jurisdiction in this case and similar ones and its lawful exercise, through legal findings and inconsistencies against the backdrop of several judgements and decisions, contributing to existing literature, to devise the right cure at the right time while also addressing the concern of judicial intervention in the matters of arbitration.

Introduction to Curative Jurisdiction

• The Supreme Court of India serves as the highest court of the land, being the only court that can exercise original jurisdiction and appellate jurisdiction as provided in the Constitution of India.
• Apart from this, it can also issue writs under Article 32 of the Constitution and can grant appeals on a special leave basis, holding the power to review any judgment pronounced or orders made by it in the form of a review petition.
• However, no judicial decision is infallible, rendering a possibility that it may, in whole or in part, contradict the principles of natural justice.
• This must be cured as the requirement of justice is paramount, per the doctrine of Ex Debitio Justiciae, which acts as an impetus to the Supreme Court to consider curative petitions to cure the defects inherent in its decisions even if a review petition is already dismissed, as a recompense for the damage suffered by the aggrieved.
• This remedy, viewed as the 'last remedy in the court of last resort,' took its ultimate form in today's legal world, not before the SC discussed an alternative to the review petition in a landmark case in 2002.
• The bench had observed that the court's jurisdiction under Article 32 cannot be invoked in this case after exhausting the resort of judicial review provided in the Constitution, requiring a unique approach to the situation at hand, for the petitioner to seek relief upon the exhaustion thereof.
• This way, it allowed for a curative petition, by using its inherent powers enshrined in the Constitution viz, passing of a decree or order as is necessary to mete out justice, to grant relief, and consequently rectify any legal anomaly.
• One of the judges had also remarked that curative petitions are admissible in cases of rarity, or in events where there is a likelihood of dwindling public confidence in the judicial fora.
• This case produced ripples, giving rise to many more in the future, which adopted the principles and guidelines laid in this case.
• Some of those principles were that of the eligibility of the petitioner to state that the grounds averred in the review petition dismissed by the circulation are the same as those contained in the curative petition, to be accompanied by the certificates of the Senior Advocate and the Advocate on Record to ascertain the claims impugned, and filing the petition within a reasonable time, among others.
• These guidelines were later stated point by point in the rules of the Supreme Court for ease of reference.
• They were applied in cases heard by the court, involving curative petitions regarding the grounds to be averred, stressing that the petition be filed within a reasonable time and that the decisions in the related cases must conform to the guidelines mentioned in the Rupa Hurra's case.
• The affidavit accompanying the curative petition must also state clearly that the petition is governed by the principles of that case.
• Although the petitions may not be specifically governed by the Limitations Act provisions, it does state that such a petition must be filed within a reasonable period.
• This was even stated in a case in which the curative petition was dismissed because no satisfactory reason was stated as to why it took 14 years for the petitioners to file such a petition.
• The power to make curative remedies was used in other important cases, one of them being the 1993 Mumbai blast case.
• The increase in the lodging of curative petitions as seen in the above cases resulted in the official recognition of curative jurisdiction, a remedy created by judicial precedent.
• It is vested solely in the SC, fueled by the provisions of Article 142 of the Constitution, which gives it the power to invoke it in any cause or matter pending before it.
• It can enable a whole or partial reversal of its decision given in a case previously heard by it, and not merely to reconsider or alter its stance on a question of law.
• This means that it can even transcend the effect of review jurisdiction.
• What is noteworthy here is the fact that a matter heard before the court that arises from a cause of action may emanate from a case tried primarily before an authority set up under a statute, like the arbitral tribunal, for instance, instituted to resolve arbitral disputes specifically.

The decisions given by such authorities may be remedied or reversed by this plenary power of the Supreme Court.

DMRC and DAMEPL: A protracted legal dispute

• The Supreme Court of India had, in a presidential reference in 2023, clarified the enforceability of agreements with an arbitration clause found unstamped or insufficiently stamped.
   
• Although the case involved stamp duty and did not involve judicial intervention, it highlighted:
  • The importance of separability between the arbitration clause and the main contract.
  • The American principle of competence, considering the arbitral tribunal's judicial autonomy.
     
• This is a good precedent to analyze the dispute between the two entities—Delhi Metro Cooperation (DMRC) and Delhi Metro Express Company (DAMEPL).
   
• The two parties signed a concession deal for Delhi Airport Metro Express Ltd. in 2008, where:
  • DAMEPL financed and built AMEL's railway infrastructure.
  • DMRC acquired property.
     
• Disputes arose when DAMEPL issued a notice to DMRC, claiming removal of defects within 90 days.
• The contract authorized DAMEPL to rescind the contract if DMRC did not rectify the breach within the timeline.
   
• Since DMRC refused to fix the defects:
  • DAMEPL terminated the agreement.
  • In 2013, DMRC began arbitration proceedings before a 3-member Arbitral Tribunal under the Arbitration and Conciliation Act of 1996.
     
• The tribunal heard the case from March 2012 to May 2017 and passed an award in favor of DAMEPL, stating that:
  • DMRC violated its contractual duties by not rectifying its default within the stipulated period.
  • DMRC failed to take remedial measures to cure the breach.
     
• Four consecutive stages of award litigation followed:
  • First stage: The Delhi High Court dismissed the challenge against the award, stating it was reasonable under Section 34 of the Arbitration Act.
  • Second stage: DMRC appealed to the High Court's Division Bench under Section 37 of the Arbitration Act. The appeal was partially granted, and the DMRC award was partially revoked.
  • Third stage: Upon appeal, the Supreme Court allowed DAMEPL's special leave petition and reinstated the DMRC award, though it was not deemed illegal or absurd.
  • Final stage: The Supreme Court annulled the DMRC award, accepting the curative petition on grounds of patent illegality.
     
• The Supreme Court's intervention in 2021 upheld the award, but by 2024, it was annulled after a detailed examination of the termination clause.
   
• The Court found:
  • The tribunal's interpretation of the clause unconscionable.
  • The requirement for DMRC to completely cure the breach was unreasonable.
  • DMRC only needed to take sufficient steps to reduce the breach's effect.
     
• The tribunal had:
  • Assumed that since some defects remained, no effort was made to fix them.
  • Failed to define what "effectively" curing defects meant within the contract.
  • Overlooked the evidentiary value of the sanction certificate issued by a statutory authority.
     
• The Arbitration Act of 1996 does not clearly define "patent illegality," but an award can be set aside if:
  • The contract structure is fundamentally unreasonable.
  • It disregards vital elements or relies on irrelevant material.
  • It infringes provisions of the 1996 Act.
     
• The court had initially upheld the award in 2021, a decision that contradicted the principles it later used to annul the award.

Judicial intervention and Arbitration Autonomy

The above cases accentuate the frequent clashes during the intervention by one entity in the affairs of the other entity, due to which their coactions must be reduced to a balanced framework, to recognize the autonomy of the institution set up under the arbitration act which is the arbitral tribunal as well as prevent judicial overreach.

But, charting out such a framework is a challenge, given the involvement of the judiciary in giving needed assistance for gathering evidence for any arbitral matter. , or for preservation or upkeep of any part of the subject matter of the contract and grant of an injunction, among other interim measures, Which become superior to those granted by the tribunal, if they are less effective as per the act , for the appointment of an arbitrator in special cases, specifically stated as not a delegation of judicial power by the apex court and giving preference to and upholding the presence of the arbitration agreement and referring the case to arbitration , among other aspects. The step-in of a judicial authority has nonetheless been kept in check by the UNCITRAL model law for international arbitration which states that the court shall not intervene in issues governed thereunder unless provided so in the law.

Similar to Article 5 of the UNCITRAL Model Law, Section 5 of the Act of 1996 places some restrictions on the scope of judicial intervention in the arbitration process, emphasizing the arbitral tribunal's independence. Interestingly, in the act, there are no explicit provisions for authorizing the Supreme Court to take cognizance of arbitral cases other than the provisions under section 34 of the Act of 1996 and filing for appeal under section 37 of the Act of 1996 for contending the legality of the award upon its declaration. Also, from a plain reading of section 37 of the arbitration act, it can be inferred that the act does not grant the apex court any jurisdiction beyond the appellate jurisdiction.

On the contrary, the Constitution under Article 142, does not bar the Supreme Court from passing any order, by its jurisdiction without any sort of restraints, to mete out 'complete' justice. , a term that is elastic in terms of its extent and interpretation. This means that the court must carefully exercise its constitutionally guaranteed jurisdiction subject to certain reasonable restrictions due to its overarching nature and achieve the completeness of justice within a reasonable period (contrary to what was taken in the DMRC case) while also acknowledging the role of other statutory authorities in working towards securing absolute justice.

It should be in harmony with the exercise of its jurisdiction in arbitration-related matters- only if the power to do so is specifically provided in the act of 1996 , if not, it must uphold the spirit of section 5 of the act which it, unfortunately, doesn't in the DMRC case. Section 37 of the act of 1996, by judicial interpretation, allows the court to undertake only an independent assessment of the arbitral award merits, and ascertain whether the lower court has not exceeded the legal scope of Section 34 .

This provision doesn't have a wider scope in so far as may be applied by the court to admit a curative petition, which was done in this case. In toto, the interference in arbitration matters by the Supreme Court is not always legally invalid but must comply with the letter and spirit of the above provisions.

Conclusion
The landscape of Indian arbitration has seen undulations in its development in India. There has been much legal and judicial expansion in this area of litigation, which evolves and moulds itself accordingly. Arbitration is a remedy based on an explicit provision in a contract and not a judicial process. As a method of dispute resolution, it should not be inevitably included in especially large contracts involving public sector establishments.

They may include the clause and initiate arbitration on the condition that the value of the dispute must cross a pre-fixed limit, or else they can adopt the procedure of mediation too, under the recently passed mediation act. And constitute an expert committee for dispute resolution. If the said disputes are not covered in the arbitration clause and the above procedures do not come to fruition, only then they should be adjudicated by the courts.

Following these guidelines can aid the process of arbitration, facilitating its very purpose of speedy and efficient resolution of disputes, and preventing unnecessary judicial intervention. There is still no specific yardstick to define the limits of the courts in this context, requiring a legal basis to balance both ends which is a challenge thoroughly explained in the paper as excluding its jurisdiction is not the answer.

This is because the Court, apart from its assistance in arbitral proceedings as stated in the paper, is tasked with the duty to supervise any activity that may be fraudulent and remove bias without correcting errors in an arbitral decision, having the power to nullify an award, within a few rounds of appeal and give the concerned parties the freedom to initiate fresh arbitration proceedings.

This process of nullification must not be prolonged unreasonably as seen in the DMRC case which can be ensured by either dismissing such cases in light of section 5 of the act of 1996 and reserving the decision of the case to the full autonomy and finality of the jurisdiction of the arbitral tribunal or, intervene and decide the case without delay. The courts must at all times adhere to the constitutional fabric while not undermining the autonomy of the arbitral tribunal or any other authority and use the curative remedy sparingly to ensure optimal judicial oversight.