This case involves a dispute between DMRC and Reliance Infrastructure Ltd. (RIL) over the construction and operation of the Delhi Airport Express Line. The project encountered significant delays and cost overruns, with both parties blaming each other. DMRC alleged that RIL failed to meet contractual obligations, while RIL argued that DMRC’s delays in approvals hindered project completion.
DMRC initiated arbitration, and the Supreme Court eventually upheld the arbitration clause, confirming its validity. The Court ruled that arbitration clauses in public-private contracts, especially in infrastructure, must be broad enough to encompass all disputes. It also affirmed that public sector undertakings must honor arbitration agreements, even when public policy considerations are involved.
The ruling underscores the importance of clear and comprehensive arbitration clauses in large-scale infrastructure projects.
By promoting arbitration as the preferred dispute resolution method, the Court has paved the way for quicker, less contentious resolutions in public-private partnerships, ensuring that critical infrastructure projects are not unnecessarily delayed by litigation.