The Supreme Court of India is a rather extraordinary court. In addition to its being the highest court of appeal, a federal court, as well as a court of advisory jurisdiction, it also possesses the power to appoint and transfer judges of the High Courts and the Court itself.
In 2002, the Court took on a new power called the “Curative Jurisdiction”. It is a power to correct its judgments, after they have become final. This is distinct from the power of review under Indian law, which enables all courts to rectify errors which are apparent from their records.
The Court has a constitutional role to declare the law. The law must, and often does, progress with the growth in human knowledge and with societal change. The judgments of courts must reflect and sometimes trigger the changes in law. It is for this reason that courts modify their views. Examples of changes in the Court’s views include the right of privacy, decriminalisation of homosexuality and so on. Curative Jurisdiction is different. This is not merely the Court changing its view on a position of law but is a reversal of the Court’s own view in a specific case, above and beyond even the power of review.
The Delhi Metro Rail judgment
In this article, we argue that the Supreme Court does more harm than good in the exercise of this jurisdiction, and we propose to demonstrate this through the analysis of a judgment rendered on April 10, 2024. This was a decision of a three-judge Bench of the Court in a curative petition in Delhi Metro Rail Corporation Ltd. (“DMRC”) vs Delhi Airport Metro Express Pvt Ltd (“DAMEPL”), which rekindles this question.
Editorial | Finality and justice: On the Delhi Metro Rail Corporation case
DAMEPL succeeded before an Arbitral Tribunal in a high value claim. The award was predicated on a plea that the termination, by DAMEPL, of a long-term contract relating to a stretch of the Delhi metro rail, was valid. Such termination was based on a termination clause which permitted DAMEPL to terminate the contract based on issuance of a notice to cure defects in the event that DMRC “failed to cure such breach or take effective steps for curing such breach”. The breach, according to DAMEPL (as upheld by the Arbitral Tribunal) was the existence of defects in the metro’s construction. According to DAMEPL and the Arbitral Tribunal, the failure to cure such defects had triggered DAMEPL’s right to terminate.
Prior to the termination, DAMEPL had stopped rail operations on the basis that the line was unsafe to operate. Shortly after the termination, both parties had made a joint request to the Commissioner of Metro Rail Safety to reopen operations. The CMRS sanctioned this subject to certain conditions including speed restrictions. While reliance had been placed on the CMRS sanction by DMRC, the AT, after examining the CMRS sanction, held that it would not be material in deciding the issues.
The challenge to the award moved to the Supreme Court which upheld the award after setting out the limited scope to challenge an award under Indian law. A review petition was also dismissed. However, for the first time ever, the Court, in a curative petition, set aside an arbitral award.
Exercise of curative jurisdiction
The interference by the Court was on two grounds. First, that interpretation of the termination clause was perverse since the Arbitral Tribunal had failed to recognise that it was sufficient for the DMRC to take effective steps to cure the breach — curing the breach in its entirety was not necessary. Second, that the CMRS sanction was vital evidence which had been ignored.
This is significant for two reasons. First, the Court had hitherto supported a position of minimal interference in arbitral awards. And second, that the Court held that its own verdict in 2019, which was in line with this pre-existing position, was wrong.
It settled law that a court, while setting aside an award does not sit as a court of appeal. The Court is bound to accept a potentially incorrect, though plausible, view on the interpretation of a contract and does not have the power to reappreciate evidence. While the Court no doubt has the power to interfere with a “perverse” interpretation, the subjective slope between a “perverse” interpretation and a “plausible but incorrect” interpretation is slippery.
Further, had the Arbitral Tribunal ignored vital evidence, a ground for interference would have been made out; but not when the Arbitral Tribunal, being the sole judge of weight of any evidence, had considered the evidence and held it to be of little significance.
Thus, the Court exercising its Curative Jurisdiction, reversed its own judgment which had upheld the arbitral award.
The problems
Imagine if you went to a dentist to have your wisdom tooth removed. The procedure is carried out. You then go to a board of senior dentists who tell you that the dentist did the right thing. Four years later, they call you back in for a review, and then tell you that they are doing a “curative procedure” and putting your wisdom tooth back in.
Curative Jurisdiction is effectively the Supreme Court seeking to correct its mistakes.
While there is merit in correcting one’s mistakes, an institution which underpins the country’s judiciary and which is the final interpreter of the Constitution must look beyond errors in individual cases. The Supreme Court declares the law for the nation and posterity, and not for one-off cases.
While it is no doubt true that the interpretation set out by the Supreme Court in DMRC vs DAMEPL is the correct interpretation and would have been justified had it been an exercise of appellate jurisdiction, the exercise itself could be said to be beyond the contours of permissible interference with an arbitral award. There are many such instances when awards based on incorrect interpretations are upheld owing to the principle of minimum judicial interference. Courts have, by and large, adopted a hands off approach, at least post 2015, to further the policy of lawmakers as reflected in the 2015 amendments to the arbitration legislation.
One looks to the Supreme Court for guidance and strength. It is the beacon of law. We expect it to be a pole star. The exercise of revisiting one’s own decisions is good in an individual, but is not good for an institution that declares the law. Our perceptions of right and wrong are often influenced by the immediacy of the trend of current thought. A Supreme Court which swings back and forth based on changing trends lacks the constancy and gravitas which we believe to be fundamental to a court of last resort.
To borrow Justice Jackson’s words, the Supreme Court is not final because it is infallible but infallible because it is final.
Srinath Sridevan is a senior advocate of the Madras High Court. Anirudh Krishnan is an advocate of the Madras High Court
