This case revolves around the dispute between Delhi Metro Rail Corporation Ltd. (DMRC) and Delhi Airport Metro Express Pvt. Ltd. (DAMEPL) concerning the operation of the Airport Metro Express Line (AMEL), connecting the Indira Gandhi International Airport with the city’s metro network. DAMEPL suspended operations citing safety issues and financial concerns, which led DMRC to terminate the concession agreement.
DAMEPL filed for arbitration, arguing that safety concerns justified halting operations, while DMRC countered by claiming DAMEPL had failed to meet contractual obligations. The Supreme Court emphasized the critical nature of adhering to contracts in public-private partnerships (PPP) and dismissed DAMEPL’s safety concerns as unsubstantiated.
The judgment highlights the importance of mutual transparency and the necessity for parties to fulfill their commitments in urban infrastructure projects, especially in sectors like public transport, which impact the lives of millions. The Court reinforced that contracts involving the public sector, particularly in vital projects like metro lines, must honor all legal obligations, including the use of arbitration as a preferred mechanism to resolve disputes quickly.
The ruling is a landmark in defining how future disputes in the PPP model should be handled, ensuring that vital public services are not disrupted. Arbitration was also validated as the appropriate means for dispute resolution, encouraging smoother and less contentious infrastructure project execution in the future.