SC criticises Arbitral Award, calls fresh hearing on SE Railway dispute

24 Jan 2024 CW Team

The Supreme Court strongly criticised an arbitral award instructing the South Eastern Railway to pay Rs 13.01 billion to a private firm, asserting that such misuse of public funds cannot be tolerated. The bench, led by Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra, expressed initial dissatisfaction with the sole arbitrator's decision, stating, "Less said the better. As judges, we also know a lot of things."

Expressing discontent with the arbitral award, the Chief Justice remarked, "I am not happy with the arbitral award. Let the case go before a dispassionate arbitrator and let this be heard again. If Railways lose there... then it is fine. But, the arbitration process cannot be allowed to be handled like this. This is why the arbitration is getting a bad name."

Emphasising the need to prevent the mismanagement of public funds, the bench stated, "The public money cannot be allowed to go waste like this."

The case pertains to the South Eastern Railway's challenge against the arbitral award favouring Kolkata-based firm Rashmi Metaliks Limited in a contractual dispute.

Despite the Supreme Court's initial reluctance to proceed, it scheduled the hearing for Thursday and directed senior advocate Abhishek Singhvi, representing the private firm, to obtain instructions.

Previously, the Calcutta High Court had granted an "unconditional stay" on the enforcement of the arbitration award, citing "glaring irregularities."

Referring to the observations made by the high court, the Chief Justice stated, "Look at what the high court has observed. We are willing to set aside the order and have a fresh arbitration. We will appoint an arbitrator for this one."

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