Supreme Court Justice Ujjwal Bhuiyan said that some unusual judgments of the Supreme Court and recent policies of the Union Finance Ministry have hampered India’s development as one of the world’s leading centers for mediation or alternative dispute resolution. Speaking at an event organized by Law Forum, he openly questioned the inconsistency of the government’s recent initiative with Prime Minister Narendra Modi’s vision of promoting institutional mediation.
The function was moderated by Senior Advocate Amit Gupta and was attended by Justice C Hari Shankar of the Delhi High Court and former Chief Justice of the Himachal Pradesh High Court Rajiv Shakdhe. Speaking on the occasion, Justice Bhuiyan referred to the special judgment of the Supreme Court in April 2024 in the dispute between Delhi Metro Rail Corporation and Delhi Airport Metro Express Pvt. “This judgment has caused the greatest damage to India’s dispute settlement system and significantly eroded investor confidence,” he said.
The judge clarified that the Supreme Court has exercised its special powers to set aside the earlier judgment despite going through several legal processes such as review by the arbitral tribunal, the High Court and the Supreme Court. This marked the fifth review of a settled dispute in effect, which is highly unusual. The court set aside an earlier judgment ordering Delhi Metro to pay nearly Rs 8,000 crore with interest as it felt that upholding the earlier judgment would be a grave miscarriage of justice.
Justice Bhuiyan also strongly criticized the recent directive of the Union Finance Ministry, saying the effect of the judgment is not limited to one case. In a memorandum issued by the finance ministry on June 3 this year, it advised government departments not to include arbitration clauses in dispute contracts worth more than Rs 10 crore. The ministry instead encouraged dispute resolution through mutual understanding. Justice Bhuiyan described the policy as a sudden and controversial shift against the mediation process.
He recalled that in 2016, Prime Minister Narendra Modi emphasized on making India one of the world’s leading arbitration hubs. However, he said, the directives of the Finance Ministry completely contradicted the views of the Prime Minister and the Foreign Minister. The judge said the government’s policy was contrary to their own earlier declarations.
In conclusion, the judge warned that such unusual court rulings and the government’s regressive policies would put India at risk of frustrating legal reforms as an arbitration-friendly country in the coming years. There has been no official response from the finance ministry or the government following Justice Bhuiyan’s remarks, but it has attracted wide attention in the legal and business circles.