Delhi High Court Penalizes DMRC for Misuse of Legal Provisions
In a notable ruling, the Delhi High Court has levied a fine of ₹5 lakh on the Delhi Metro Rail Corporation (DMRC) for what it deemed a misuse of legal provisions intended for correcting clerical errors in arbitral awards. The court suggested that DMRC’s actions were likely aimed at buying time to contest an unfavorable arbitration award. This case is formally titled Delhi Metro Rail Corporation Ltd v HCC Samsung JV.
The decision, dated August 17, was issued by a Division Bench comprising Justices C Hari Shankar and Om Prakash Shukla. The judges criticized DMRC’s application under Section 33 of the Arbitration and Conciliation Act, 1996, remarking that it was more of an attempt to reopen the entire dispute rather than merely rectify any clerical, typographical, or computational mistakes.
The Bench noted, “It is not possible for us to believe that an organization such as the appellant did not know the fundamentals of Section 33 and what is permitted thereunder. This, therefore, is a classic case of misuse of Section 33, perhaps with a view to obtain breathing space to launch the challenge to the substantive award.” Despite this, the Bench overturned a previous ruling by a single judge that dismissed DMRC’s challenge to the award as being time-barred.
The Bench referenced recent Supreme Court decisions, clarifying that the limitation period for contesting an award starts from the date a Section 33 application is resolved, even if the application is deemed frivolous or extends beyond its intended scope.
The underlying dispute traces back to a contract signed in February 2013, where HCC Samsung Joint Venture was contracted to handle civil works for DMRC. By July 2018, the joint venture sought compensation for work variations and project delays. When DMRC declined to honor the claim, the matter was escalated to a three-member arbitral tribunal. A majority award was issued on February 23, 2024, followed by a dissenting award on February 28.
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On March 22, DMRC filed a Section 33 application, purporting to seek corrections in the majority award. The application challenged several substantive findings, including those pertaining to additional cross-passages, extended-stay expenses, and revised minimum wages. The tribunal rejected this application on June 3, 2024. Subsequently, DMRC approached the High Court on August 29 with a Section 34 petition to annul the award. This was initially dismissed as time-barred by a single judge in February 2025.
The Division Bench, however, disagreed with the single judge’s decision, drawing on the Supreme Court’s rulings in Geojit Financial Services Ltd v Sandeep Gurav and National Highways Authority of India v T Younis. According to these rulings, once a formal Section 33 application is filed within the stipulated 30 days and with due notice to the opposing party, the limitation period starts from the date of its resolution, regardless of the application’s merit.
The court stated, “The Section 34 petition cannot, however, be dismissed as time-barred, ignoring the time spent in disposing of the Section 33 application, howsoever frivolous it might have been.” As a result, DMRC was ordered to pay HCC Samsung JV ₹5 lakh in costs, with a deadline of twelve weeks for payment. The court considered the fact that DMRC is a public sector undertaking, noting that a higher penalty would burden the public exchequer.
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Representing DMRC were Senior Advocate Parag P Tripathi and advocates Tarun Johri, Vishwajeet Tyagi, and Rini Mehra. HCC Samsung JV was represented by Senior Advocate Dayan Krishnan, along with advocates Kartik Yadav, Parinay T Vasandani, Siddhant Kaushik, Shriyanshi Pathak, Yugandhara Pawar Jha, and Abhimanyu Arya.
[Read Judgment]
