‘Regressive’: Justice Ujjal Bhuyan flags judicial intervention, finance ministry policy as setback to arbitration

India's ambition to become a global arbitration hub is being undermined by "erratic court verdicts" and "regressive" government policies, warned Supreme Court judge Justice Ujjal Bhuyan. In a candid critique, Justice Bhuyan highlighted how recent judicial interventions and decisions by the Union finance ministry have weakened investor confidence in India's arbitration framework.

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erratic court verdicts

Delivering a keynote address, Justice Bhuyan specifically pointed to a Supreme Court judgment in April 2024 concerning the Delhi Metro Rail Corporation (DMRC) arbitration dispute. He described this ruling, which used extraordinary curative jurisdiction to overturn a high-value arbitral award that had already survived multiple legal challenges, as causing "the most extensive damage to arbitration in India." The judge noted that the court effectively reopened the dispute for a fifth round of scrutiny, contradicting its own caution against excessive judicial intervention.

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regressive

This judgment overturned a previous Supreme Court decision that had upheld an arbitral award directing DMRC to pay nearly ₹8,000 crore to Delhi Airport Metro Express Pvt Ltd. The curative bench had argued that the arbitral tribunal ignored crucial evidence, leading to a miscarriage of justice. However, Justice Bhuyan argued that the consequences of this ruling extend far beyond the specific dispute, raising serious questions about India's suitability as a destination for commercial dispute resolution.

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the most extensive damage to arbitration in India.

Adding to the concern, Justice Bhuyan also referenced a June 3, 2024 office memorandum from the Union finance ministry. He suggested that the ministry's policy changes, particularly those citing the Supreme Court's DMRC judgment, are "regressive" and further damage the country's arbitration prospects. The judge questioned how these actions could be reconciled with Prime Minister Narendra Modi's stated vision of promoting institutional arbitration.

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In curative jurisdiction, Supreme Court undertook a detailed review of the merits... effectively the fifth round of challenge to the award.