Delhi High Court Upholds Arbitral Award in DMRC-Parsvnath Dispute

Court Dismisses Petition Challenging Tribunal's Decision, Validates Termination of Concession Agreement

In a significant ruling, the Delhi High Court, presided over by Justice Jasmeet Singh, dismissed the petition filed by Parsvnath Developers Ltd., challenging the arbitral award that favored the Delhi Metro Rail Corporation Limited (DMRC). The judgment, dated November 11, 2025, was sought under Section 34 of the Arbitration and Conciliation Act, 1996, which provides limited grounds for challenging arbitral awards.

The dispute arose from a Concession Agreement between Parsvnath Developers and DMRC, concerning the development of the Station Box at Tis Hazari Metro Station. The Arbitral Tribunal had earlier rejected Parsvnath's claims and upheld DMRC's counterclaims, prompting Parsvnath to seek judicial intervention.

Key to the dispute was the termination of the Concession Agreement by DMRC, citing non-payment of arrears under the recurring payment clause. Parsvnath argued that the termination was invalid due to delays in obtaining necessary statutory clearances, which they claimed were solely attributable to DMRC. However, the Tribunal and subsequently the High Court found that the delays were not solely the fault of DMRC.

Justice Singh noted that the Tribunal's findings were reasonable and based on documentary evidence. The court emphasized the limited scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996, which does not allow for interference unless the award conflicts with public policy, involves patent illegality, or violates principles of natural justice. The court concluded that Parsvnath failed to establish any such grounds.

The judgment underscores the judiciary's deference to arbitral proceedings and the sanctity of arbitration as a mechanism for dispute resolution. It reinforces the principle that courts should not re-assess factual findings made by arbitral tribunals unless there is a clear case of a legal transgression.

The High Court's decision to uphold the arbitral award reinforces the validity of the Concession Agreement's termination and dismisses Parsvnath's plea for setting aside the award. The ruling also highlights the importance of timely compliance with contractual obligations and the consequences of failing to meet financial commitments.

Bottom Line:

Arbitration - Scope of Section 34 of Arbitration and Conciliation Act, 1996 - Limited grounds for challenge to arbitral awards under Section 34 - Arbitral Award cannot be set aside unless it conflicts with public policy, involves patent illegality, or violates principles of natural justice.

Statutory provision(s): Arbitration and Conciliation Act, 1996, Section 34

Parsvnath Developers Ltd. v. Delhi Metro Rail Corporation Limited, (Delhi) : Law Finder Doc Id # 2806690