Delhi HC Imposes Rs 5 Lakh Costs on DMRC for Misusing Section 33 Arbitration Provision to Delay Award Challenge

Kaustav Chowdhury
6 days ago
5 min read

On August 17, 2026, a Division Bench of the Delhi High Court comprising Justices C Hari Shankar and Om Prakash Shukla imposed costs of Rs 5 lakh on the Delhi Metro Rail Corporation (DMRC) for misusing Section 33 of the Arbitration and Conciliation Act, 1996 in the case of Delhi Metro Rail Corporation Ltd v HCC Samsung JV. Section 33, which permits correction of clerical, typographical, and computational errors in arbitral awards, was deployed by DMRC to seek what the court described as a wholesale re-adjudication of the tribunal's findings.

Describing the application as a 'classic case of misuse of Section 33, perhaps with a view to obtain breathing space to launch the challenge to the substantive award,' the court nonetheless restored DMRC's challenge to the arbitral award under Section 34. This seemingly contradictory outcome, combining cost penalties with the revival of DMRC's case, was driven by recent Supreme Court precedent on how the limitation period under Section 34(3) interacts with Section 33 applications.

The Contract Dispute and Arbitral Award

The dispute originated from a February 2013 contract under which HCC Samsung Joint Venture was engaged to execute civil works for Phase III of the Delhi Metro Project, including the design and construction of tunnels and metro stations. The contract encountered significant delays, leading to multiple extensions. In July 2018, HCC Samsung JV submitted claims for compensation on account of variations in the work and delays in completion. When DMRC rejected these claims, the joint venture invoked arbitration in 2019, and the matter was referred to a three-member arbitral tribunal.

The tribunal issued its majority award on February 23, 2024, ruling in favour of HCC Samsung JV and awarding approximately Rs 60.28 crore (Rs 60,28,15,579). DMRC's counterclaims were rejected. A dissenting award followed on February 28, 2024. Parties facing such outcomes in arbitration proceedings typically consider two pathways: applying for correction under Section 33 or challenging the award under Section 34.

What Section 33 of the Arbitration Act Permits

Section 33(1)(a) of the Arbitration and Conciliation Act, 1996 allows a party, within thirty days of receiving an arbitral award and with notice to the other party, to request the tribunal to correct any computation errors, clerical or typographical errors, or any other errors of a similar nature in the award. Under Section 33(1)(b), an interpretation of a specific point may also be sought if agreed between the parties. Section 33(4) permits a request for an additional award on claims presented but omitted from the original award.

The provision's scope is deliberately narrow. It is designed for rectifying inadvertent mistakes, not for revisiting the tribunal's substantive reasoning. Courts have consistently held that applications under Section 33 that effectively seek a review or rehearing of the dispute exceed its permissible scope.

DMRC's Section 33 Application and the Limitation Controversy

On March 22, 2024, within the thirty-day window, DMRC filed an application under Section 33 describing the relief as correction of 'typographical and computational' errors. However, the application questioned substantive findings, including those relating to additional cross-passages, extended-stay expenses, and revised minimum wages. The tribunal rejected this application on June 3, 2024, holding that the corrections sought exceeded Section 33's scope and amounted to a review.

The critical legal issue arose under Section 34(3), which provides that an application for setting aside an arbitral award must be filed within three months of receiving the award. Crucially, where a request has been made under Section 33, the three-month period runs from the date on which that request is disposed of by the tribunal. DMRC filed its Section 34 petition on August 29, 2024. If limitation were calculated from the award date (February 23, 2024), the petition was out of time. If calculated from the disposal of the Section 33 application (June 3, 2024), it fell within the prescribed window.

Single Judge's Dismissal and the Division Bench's Reversal

A single judge of the Delhi High Court, in February 2025, held that DMRC's Section 33 application was a mischievous attempt to circumvent the limitation period. Since the application was in substance a review rather than a genuine correction request, it could not extend the limitation clock, and the Section 34 petition was dismissed as time-barred.

On appeal, the Division Bench took a different view, guided by the Supreme Court's decisions in Geojit Financial Services Ltd v Sandeep Gurav (2025 INSC 1021) and National Highways Authority of India v T Younis. These rulings establish that once a formal Section 33 application is filed within the stipulated thirty-day period and with notice to the opposite party, the limitation period under Section 34(3) begins from the date of its disposal, regardless of whether the application was meritorious or even maintainable.

'The Section 34 petition cannot, however, be dismissed as time barred, ignoring the time spent in disposing of the Section 33 application, howsoever frivolous it might have been,' the Division Bench observed. The statutory language of Section 34(3), the court noted, draws no distinction between bona fide and mala fide Section 33 applications. The Section 34 challenge was accordingly restored.

The Rs 5 Lakh Cost Order

While restoring the Section 34 challenge, the Division Bench made clear that misuse of Section 33 carries financial consequences. Finding DMRC's application 'completely lacking in bona fides,' the court imposed Rs 5 lakh in costs payable to HCC Samsung JV within twelve weeks. The court observed: 'It is not possible for us to believe that an organisation such as the appellant did not know the fundamentals of Section 33 and what is permitted thereunder.' The Bench noted it had moderated the costs given that DMRC is a public sector undertaking and a larger amount would ultimately affect the public exchequer.

Senior Advocate Parag P Tripathi represented DMRC, while Senior Advocate Dayan Krishnan appeared for HCC Samsung JV.

Implications for Arbitration Practice

This ruling highlights an emerging tension in Indian arbitration law. The Supreme Court's bright-line rule provides certainty by treating all Section 33 applications equally for limitation purposes. However, this simultaneously creates a tactical incentive for parties to file meritless applications purely to reset the limitation clock. The cost mechanism employed by the Delhi High Court represents one corrective tool. Recent cases involving challenges to large arbitral awards suggest courts are becoming increasingly alert to procedural manoeuvring, particularly by government entities in infrastructure disputes.

Key Takeaways

Section 33 of the Arbitration and Conciliation Act, 1996 is strictly limited to correcting computation errors, clerical or typographical errors, and similar mistakes; it does not permit substantive review of the tribunal's findings.

Under Section 34(3), a formal Section 33 application filed within thirty days defers the limitation period for a Section 34 challenge to the date of its disposal, even if the application lacks merit, per the Supreme Court's rulings in Geojit Financial Services Ltd v Sandeep Gurav and NHAI v T Younis.

Courts retain the power to impose costs on parties that misuse Section 33, as demonstrated by the Rs 5 lakh cost order against DMRC in this case.

The decision serves as a cautionary precedent for public sector undertakings and other parties considering tactical use of Section 33 to extend limitation periods.