SC rejects DMRC appeal on R-Infra payment
The Supreme Court rejected a petition of Delhi Metro Rail Corporation (DMRC) against an order of the high court here to make a ~60-crore interim payment to Reliance Infrastructure (R-Infra) on the dispute over the airport line.
Last month, R-Infra had won a ~2,950-crore arbitration award against DMRC for alleged breach of the agreement on the Airport Express line. The apex court directed DMRC to make the interim payment to the lenders of Delhi Airport Express Pvt (DAMEPL), a subsidiary of RInfra, within a week.
The SC’s vacation bench said, “We see no reason to interfere with the impugned judgment (of the HC).”
According to sources, if interest of ~1,775 crore is included, the total goes up to ~4,725 crore, possibly the largest arbitration award. The compensation covers damages as a result of the alleged breach by DMRC of its obligations under the Concession Agreement and Material Adverse Effect.
The award was granted on the basis of termination provisions of the concession agreement, in accordance with which the arbitration tribunal has held the termination of the contract by DAMEPL valid, R-Infra had earlier said.
It was given by a threemember arbitration tribunal, formed out of a DMRC-nominated panel, which heard the case for about three and a half years. Under governmentapproved guidelines given by the NITI Aayog, public sector undertakings are expected to pay 75 per cent of the award amount against a bank guarantee, even if they want to challenge the award.
DAMEPL had terminated the concession agreement with DMRC for the Airport Metro line in October 2012. Commercial operations had started in February 2011 and were suspended when a fault in the civil structure was detected in July 2012. The project was handed over to DMRC in July 2013.