Court upholds RInfra award against DMRC

The Anil Ambani-led Reliance Infrastructure on Tuesday said the Delhi High Court had upheld its arbitration award of ~29.50 billion as compensation along with interest to Delhi Airport Metro Express Pvt Limited (DAMEPL), a subsidiary of Reliance Infrastructure (RInfra).

The company said in its statement it expected to receive ~50.60 billion from the arbitration award inclusive of interest applicable up to March 31, 2018.

The high court also directed the Delhi Metro Rail Corporation (DMRC) to deposit ~35.02 billion in an escrow account within four weeks, the company added. According to a 2016 government directive, state agencies are expected to deposit 75 per cent of an arbitral award they wish to dispute in an escrow account.

RInfra plans to utilise the proceeds from the award to retire debt. “Now that the Delhi High Court has upheld the award by the arbitration tribunal, we expect the compensation to be paid expeditiously, which we shall utilise to retire the outstanding debt of RInfra and DAMEPL,” a spokesperson for the company said in the statement.

As of March 2017, RIfra had a total consolidated debt of ~265.56 billion.

DMRC executives did not comment on the order. DAMEPL had in October 2012 served a termination notice for its concession agreement to DMRC for the Delhi Airport metro line over failure to cure defects in the structure. Following this, DMRC had taken over operations of the line from RInfra in July 2013.

In September 2013, a three-member arbitration tribunal was formed in accordance with the concession agreement. The tribunal in May 2017 awarded RInfra compensation, which DMRC later challenged in the Delhi High Court.

“The high court upheld the validity of the award granted by the three-member arbitration tribunal,” the company said on Tuesday.

According to a 2016 govt directive, state agencies are expected to deposit 75% of an arbitral award they wish to dispute in an escrow account