PSUs Biggest Victims of Fraud in Arbitration; Devas-Antrix is Example – Justice Satish Chandra Sharma

At a discussion during the Delhi Arbitration Weekend, Supreme Court Justice Satish Chandra Sharma sounded an alarm about how Public Sector Undertakings (PSUs) are especially vulnerable to fraud and financial irregularities during arbitration proceedings. He asserted that at various stages—agreement drafting, during arbitration, or even in enforcement—there are internal agents (“moles”) in PSUs who skew outcomes in favour of counter-parties. The Devas-Antrix case was cited by him as an example of such misconduct.He emphasized that although courts often sense when fraud or financial crime has tainted arbitration, legal remedies like setting aside arbitral awards under Sections 34 or 37 of the Arbitration & Conciliation Act are hard to invoke, as the bar is high. Justice Sharma rejected the argument that concern about delay should prevent thorough inquiry into fraud. He urged that judicial oversight is necessary and that policy constraints should not excuse ignoring serious allegations. The session also featured counterpoints from arbitration experts on balancing party autonomy (a cornerstone of arbitration) with necessary oversight when serious malfeasance is alleged.