Rinfra to get ~5,000 cr in Delhi Metro case
The Supreme Court (SC) on Thursday allowed a special leave petition filed by Delhi Airport Metro Express, challenging the judgement of the Delhi High Court (HC) that had set aside the arbitral award to be paid by Delhi Metro Rail Corporation.
The Supreme Court (SC) on Thursday allowed a special leave petition filed by Delhi Airport Metro Express (DAMEPL), challenging the judgment of the Delhi High Court (HC) that had set aside the arbitral award to be paid by Delhi Metro Rail Corporation (DMRC).
DAMEPL, a special purpose vehicle floated by Reliance Infrastructure (Rinfra), had won the ~2,800-crore award in 2017. “Along with interest and other costs, the amount would be over ~5,000 crore. DMRC would now have to pay the amount to the Anil Ambani group company,” said a government official who did not want to be quoted.
“The victory comes at a time for Anil Ambani, who is now in bankruptcy, and the money could be used to pay off loans owed to Reliance ADA Group,” said Sonam Chand- wani, managing part- ner at KS Legal & Asso- ciates. Rinfra’s consolidated debt was ~14,260 crore; its sta- ndalone debt ~3,808 crore as of March. It also raised ~550 crore from promoter group and VSFI Holding Pte — an affiliate of Värde Investment Partners, LLP.
The apex court also dismissed a plea by DMRC contesting an order of a Delhi High Court division bench on issues of grant of interest and waiver of the termination notice due to DAMEPL’S conduct of operating the project for more than five months.
DAMEPL signed a contract with DMRC in 2008 to operate the country’s first private city rail project until 2038. “The (arbitration) tribunal awarded interest in accordance with the terms of the Concession Agreement on termination payment. DMRC contended before the High Court that the award in respect of interest had to be set aside on the ground that it would result in unjust enrichment. After a thorough consideration of Article 29.8 and Article 36.2.6.1 of the
Concession Agreement, the High Court has rightly refused to interfere with the findings by the Tribunal relating to interest and we see no cause for interference,” the SC said in its order. This formed the basis of allowing appeal and setting aside the order of the division bench of the high court.
Following disagreements over fee and operations in 2012, Rinfra ceased operations of the Capital’s airport Metro project and filed an arbitration complaint against DMRC, alleging contract violations and sought a termination fee.
The apex court also issued a notice to DMRC on the Airport Express’ plea for interim to continue servicing the debt of the SPV, pending the SC'S disposal of the petition.
The SPV borrowed over ~1,600 crore from 11 banks, including Axis Bank, UCO Bank, Punjab & Sind Bank, Andhra Bank, and Central Bank of India. The amount, including interest, has touched ~5,000 crore.
The Delhi HC in March 2018 asked DMRC to service all debt liabilities of the SPV and make payments to banks to avoid the account from turning into a non-performing asset. The SPV moved the apex court after a division Bench of the Delhi HC set aside an order of a single-judge Bench, upholding the award in favour of the Delhi Airport Express.
DAMEPL was awarded the execution of a 22.7-kilometre high-speed Metro rail line in 2008. It was decided to develop the project by engaging a concessionaire for financing, design, procurement, and installation of all systems (including but not limited to rolling stock, overhead electrification, track, signalling and telecommunication, ventilation and air conditioning, automatic fare collection, baggage checkin and handling, depot, and other facilities).
DMRC had to undertake the design and construction of the basic civil structure for the project, which was in the nature of a public-private partnership.
DAMEPL, a SPV floated by Rinfra, had won the ~2,800-crore award in 2017