Delhi High Court imposes ₹5 lakh costs on DMRC for filing sham plea

The Delhi High Court has imposed costs of ₹5 lakh on the Delhi Metro Rail Corporation (DMRC) for misusing a provision meant for correcting clerical errors in arbitral awards, possibly to gain additional time to challenge an award passed against it [Delhi Metro Rail Corporation Ltd v HCC Samsung JV]..In an order passed on August 17, a Division Bench of Justices C Hari Shankar and Om Prakash Shukla said that DMRC’s application under Section 33 of the Arbitration and Conciliation Act, 1996 sought a re-adjudication of the entire dispute rather than the correction of any clerical, typographical or computational error.“It is not possible for us to believe that an organisation 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,” the Court said.However, the Bench set aside a single-judge’s decision dismissing DMRC’s challenge to the award as time-barred. It held that under recent Supreme Court rulings, the limitation period for challenging an award begins from the date on which a formal Section 33 application (application for correction of award) is disposed of, even if that application is frivolous or travels beyond the scope of the provision..The dispute arose from a February 2013 contract under which HCC Samsung Joint Venture was to execute civil works for DMRC. In July 2018, the joint venture claimed compensation for variations in the work and delays in its completion.After DMRC rejected the claim, the dispute was referred to a three-member arbitral tribunal. The tribunal’s majority award was released on February 23, 2024, while a dissenting award was released on February 28.On March 22, DMRC filed an application under Section 33 seeking what it described as corrections to the majority award. The application questioned several substantive findings, including those relating to additional cross-passages, extended-stay expenses and revised minimum wages.The tribunal rejected the application on June 3, 2024. DMRC then filed a petition before the High Court on August 29 under Section 34 to set aside the award.A single-judge dismissed the petition in February 2025, holding that the Section 33 application was a mischievous attempt to circumvent the limitation period..The Division Bench disagreed with the outcome in view of the Supreme Court’s decisions in Geojit Financial Services Ltd v Sandeep Gurav and National Highways Authority of India v T Younis.The Bench said these rulings make it clear that once a formal Section 33 application is filed within 30 days and with notice to the opposite party, limitation begins from the date of its disposal, regardless of whether the application was maintainable..“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,” the Court held..Finding DMRC’s application “completely lacking in bona fides”, the Court imposed ₹5 lakh in costs, payable to HCC Samsung JV within twelve weeks. It noted that it had moderated the costs since DMRC is a public sector undertaking and any larger amount would ultimately affect the public exchequer..Senior Advocate Parag P Tripathi along with advocates Tarun Johri, Vishwajeet Tyagi and Rini Mehra represented DMRC..Senior Advocate Dayan Krishnan along with advocates Kartik Yadav, Parinay T Vasandani, Siddhant Kaushik, Shriyanshi Pathak, Yugandhara Pawar Jha and Abhimanyu Arya appeared for HCC Samsung JV..[Read Judgment]