Rinfra wins `2,950-cr arbitration award against Delhi Metro

DELHI AIRPORT METRO LINE DISPUTE

RELIANCE INFRASTRUCTURE (Rinfra) said on Thursday that an arbitral tribunal has awarded its arm — Delhi Airport Metro Express Private Limited (DAMEPL) — an amount of Rs 2,950 crore against the Delhi Metro Rail Corporation (DMRC).

The 22.7-km Delhi airport metro line, which connects the New Delhi railway station with the T3 airport terminal, was a joint venture between DAMEPL and DMRC, where the DMRC built the civil infrastructure and spent more than half of the Rs.5,700-crore project cost while DAMEPL brought in the rolling stock and was supposed to run it for 30 years. But Reliance Infrastructure pulled out of the agreement with DMRC in July 2013, saying the project was not financially viable.

The award has been granted on the basis of termination provisions of the concession agreement,wherethetribunalhasheld the termination of the pact by DAMEPL as "valid", Rinfra said. The compensation covers damage as a result of 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.

Rinfra said the decision of the three member arbitral tribunal was "unanimous". The tribunal was constituted from a panel nominated by DMRC, Rinfra said, adding that it will pay lenders' debt of Rs 1,900 crore from the compensation award.

DMRC executive director, corporate communications, Anuj Dayal, said:"we are studying the award given by the arbitrators in the airport express line case and will decide our further course of action in the matter after due deliberation."

The firm said that it participated in the PPP (public, private partnership) model in the metro sector "but unfortunately, it had toterminatetheagreement"."we welcome the award and hope it will encourage the private sector to participate in the nation-building process,” Rinfra said.

The Arbitral Tribunal's award in May comes after hearings on the that went on for over three years. The Tribunal heard the submission made by both the parties and issued its final order awarding compensation to the DAMEPL after hearing it in detail in 68 proceedings.

The Delhi airport metro line was a JV between DAMEPL and DMRC, where DMRC built the infrastructure and DAMEPL was supposed to run it for 30 years