The Supreme Court on Friday sought response from Delhi Metro Rail Corporation (DMRC) on an appeal filed by Delhi Airport Metro Express (DAMEPL) — a Reliance Infrastructure subsidiary — against the Delhi High Court’s order that set aside an arbitration award of around rS 4,500 crore, including interest, in favour of the Anil Ambani company.
The Supreme Court on Friday sought response from Delhi Metro Rail Corporation (DMRC) on an appeal filed by Delhi Airport Metro Express (DAMEPL) — a Reliance Infrastructure subsidiary — against the Delhi High Court’s order that set aside an arbitration award of around rS 4,500 crore, including interest, in favour of the Anil Ambani company. DAMEPL had pulled out from running the Airport Express metro line over safety issues.
A bench led by justice AK Sikri issued notice to DMRC on an appeal against the HC division bench’s January 15 order that reversed its single judge’s decision. The single judge on March 6 last year had upheld the arbitration award and directed DMRC to pay the money to DAMEPL.
The arbitral tribunal in its May 2017 award had accepted DAMEPL’s claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run.
The HC said the tribunal had ignored and did not consider vital evidence of certification for commercial operations accorded by Commissioner of Metro Rail Safety (CMRS) while deciding the question of civil structure faults and instead it held that no effective steps to cure the defects were taken. “The reasoning virtually over-rules, negates and rejects statutory certification accorded by CMRS. Arbitral tribunal without reason has held that the permission accorded and subsequent satisfactory commercial operations were not relevant and inconsequential. Pertinently certification/permission was granted by CMRS after due verification of the civil structure including the defects in girders.
The HC had also court gave liberty to both DMRC and DAMEPL to invoke arbitration clause for fresh adjudication on their claims and counter claims.
Soon after launching a joint public-private partnership to build operate and run the Airport Express Line on August 25, 2008, the DMRC-DAMEPL partnership fell apart over some defects in the line identified by the private concessionaire, which were allegedly not cured by DMRC. The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore. Citing the inability of DMRC to cure the defects, the Reliance arm terminated the contract and “abandoned” the project, saying the CMRS certificate was granted with the conditions that the trains have to be run at reduced speeds and frequency which would make the operations commercially unviable for it. However, DMRC said that it has been running the airport line since June 2013 when DAMEPL abandoned the project despite repairs of structural defects in November 2012.
When all attempts at resolving the dispute failed, DMRC took the case to arbitration and an award was given in favour of DAMEPL. The award asked DMRC to pay nearly `3,000 crore, along with interest.