The Delhi Metro Rail Corporation (DMRC) on Tuesday moved the Supreme Court against the Delhi High Court’s last week’s order that asked it to pay Rs 60 crore as three months interest to a lender of Delhi Airport Metro Express Private, a former concessionaire for airport express line.
The Delhi Metro Rail Corporation (DMRC) on Tuesday moved the Supreme Court against the Delhi High Court’s last week’s order that asked it to pay Rs 60 crore as three months interest to a lender of Delhi Airport Metro Express Private, a former concessionaire for airport express line. A vacation bench comprising justices P C Pant and Deepak Gupta posted the matter for hearing on June 19. DMRC has challenged the June 7 order of High Court that upheld its single judge order asking it to pay the three months interest to DAMEPL. The single judge had directed the DMRC to deposit the amount of Rs 60 crore within 10 days directly into DAMEPL’s loan account with Axis Bank – the main lender. This was ordered after DAMEPL, a subsidiary of Reliance Infrastructure, had sought early payment of the award, claiming it was paying Rs 65 lakh per day to its lenders, comprising public and other banks, since the termination of its agreement with DMRC to run the Airport Metro line.
The DMRC in its appeal sought stay on the interim order on the grounds that it would amount to partial implementation of the award and would also be akin to dismissal of its objections against enforcement of award. The Anil Ambani company had claimed a total compensation of Rs 4,670 crore, which includes the penalty and the interest on it, from DMRC. The compensation awarded by the arbitral tribunal in May covers damage as a result of a breach by DMRC of its obligations under the concession agreement and material adverse effect on the ability of DAMEPL to perform its obligations under the concession pact.
The single judge had in its interim order of May 30 asked the DMRC to pay the interest after DAMEPL had sought early payment of Rs 3,502 crore, which is 75% of the arbitral award of Rs 4,670 crore, granted in its favour on May 11.
DAMEPL, a joint venture of Rinfra and a Spanish construction company Construcciones Y Auxiliar De Ferrocarriles with a shareholding of 95% and 5% per cent respectively, had sought early enforcement of the award, claiming under the guidelines issued by Niti Aayog on September 5, 2016, public sector undertakings (PSUs) are to pay 75% of the award amount even if they propose to challenge the arbitral award.
However, DMRC had argued before the single judge that the Niti Aayog guidelines would not apply in the matter as the award was of May 11 and it had 90 days to challenge the arbitral tribunal’s decision.
DMRC has opposed maintainability of the plea for enforcement of the award which was granted in favour of the concessionaire by a unanimous decision of a three-member arbitration tribunal on May 11. The dispute was referred to arbitration in August 2013 after efforts to amicably resolve the issues did not yield results.
The Airport Express line was commissioned on February 23, 2011 after an investment of Rs 2,885 crore funded by DAMEPL’s promoters’ fund, banks and financial institutions. According to DAMEPL’s plea, the concession agreement was entered into between the two on August 25, 2008. In 2012, Reliance Infrastructure, which had the contract to develop and operate the metro express project in the capital, terminated the contact citing DMRC had failed to fix the civil structure defects in the project.
According to the petition, the agreement was with effect from January 1, 2013 and the project was handed over to the DMRC on June 30, 2013. Till handing over of the project, the DAMEPL had operated the line as a deemed agent of DMRC, it said.