Setback for DMRC: Supreme Court upholds over Rs 4,600-crore arbitral award in favour of Reliance Infra

By: |
September 10, 2021 5:15 AM

Soon after launching a joint public private partnership to build, operate and run the Airport Express line on August 25, 2008, DMRC and DAMEPL’s pact had fallen apart over some issues. Subsequently, DAMEPL pulled out from running the metro line over safety issues.

A bench led by Justice LN Rao while upholding the arbitration award in favour of DAMEPL, set aside the Delhi High Court’s division bench’s order that had set aside the arbitration award.A bench led by Justice LN Rao while upholding the arbitration award in favour of DAMEPL, set aside the Delhi High Court’s division bench’s order that had set aside the arbitration award.

The Supreme Court on Thursday upheld the over Rs 4,600-crore arbitration award in favour of Anil Ambani’s group firm, Delhi Airport Metro Express (DAMEPL), enforceable against Delhi Metro Rail Corporation (DMRC). The DAMEPL is part of Reliance Infrastructure.

The arbitral award was passed in 2017.

A bench led by Justice LN Rao while upholding the arbitration award in favour of DAMEPL, set aside the Delhi High Court’s division bench’s order that had set aside the arbitration award. The amount, which as of now is over Rs 4,600 crore, including interest, will help the beleaguered group to repay its debts.

Soon after launching a joint public private partnership to build, operate and run the Airport Express line on August 25, 2008, DMRC and DAMEPL’s pact had fallen apart over some issues. Subsequently, DAMEPL pulled out from running the metro line over safety issues.

While DMRC has been running the Airport Express line since 2013, it had taken the case to arbitration. The arbitral tribunal in its May 2017 award accepted the 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 award asked DMRC to pay nearly Rs 3,000 crore, along with interest.

DAMEPL had moved the SC against the HC’s order which had set aside the arbitration award.

The Supreme Court had earlier restrained banks from declaring the debts of DAMEPL as non-performing assets until further orders.

Welcoming the judgment, counsel Mahesh Agarwal, appearing for DAMEPL, said, “The landmark judgment settles the controversy and directs enforcement of termination payment, which is payable to a concessionaire to compensate for the investment made by the private companies. The judgment also provides comfort to banks/FIs which fund largescale infrastructure projects.

Besides, the SC reaffirmed the principle of non-interference into arbitration awards.”

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