Justice Bhuyan Criticizes Supreme Court's Delhi Metro Arbitration Judgment and Policy Reversal in India
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TL;DR
- Justice Ujjal Bhuyan criticized the Supreme Court's Delhi Metro arbitration judgment as highly damaging to arbitration in India.
- The April 2024 judgment set aside a major arbitral award in favor of Delhi Airport Metro Express Pvt. Ltd.
- This led to a shift in government policy discouraging arbitration in high-value government contracts.
- Justice Bhuyan warned that these developments undermine India's efforts to be a global arbitration hub.
Overview
At a legal event in July 2026, Supreme Court Justice Ujjal Bhuyan strongly criticized the Supreme Court's 2024 Delhi Metro Rail Corporation Ltd. v. Delhi Airport Metro Express Pvt. Ltd. decision, calling it highly damaging to India's arbitration landscape. Justice Bhuyan argued that the ruling and subsequent government policy changes have reversed years of progress aimed at positioning India as an arbitration-friendly jurisdiction.
What Happened
Justice Bhuyan delivered remarks at an event on arbitration reform, describing the Supreme Court's April 2024 Delhi Metro judgment as unprecedented in its use of curative jurisdiction to set aside a high-value arbitration award, despite the award having survived multiple prior judicial reviews.
The judgment overturned a nearly ₹2,800-crore arbitral award in favor of Delhi Airport Metro Express Pvt. Ltd. after the Supreme Court found it suffered from patent illegality.
Following this decision, the Finance Ministry issued a memorandum on June 3, 2024, advising government departments to avoid using arbitration clauses in contracts above ₹10 crore, highlighting concerns that government arbitrations fail to achieve finality due to repeated legal challenges.
Public sector companies and government departments, including OIL, ONGC, and the Ministry of Road Transport and Highways, reportedly began excluding arbitration from high-value contracts as a result.
Context
The Delhi Metro arbitration judgment was rendered by a three-judge Supreme Court bench, overturning a previous restoration of the arbitral award to DAMEPL after multiple rounds of litigation under various statutory and constitutional provisions.
Justice Bhuyan also mentioned a recent trend toward increased judicial interference in arbitration, referencing the Gayatri Balasamy case and warnings that proposed legislative reforms such as the creation of an Appellate Arbitral Tribunal could add further layers of challenge rather than reducing judicial intervention.
Why It Matters
- Justice Bhuyan's critique reflects concerns from the arbitration community that the Delhi Metro judgment and subsequent policy changes undermine the principle of minimal judicial intervention in arbitration.
- These developments may deter parties, especially in large commercial and government contracts, from choosing arbitration in India, impacting the country's ambition to serve as a global arbitration hub.