Delhi High Court directs DMRC to pay Rs 6,330 crore to Reliance Infra arm

The Delhi High Court on March 10 directed Delhi Metro Rail Corporation Ltd (DMRC) to pay Rs 6,330 crore to a subsidiary of Reliance Infrastructure Ltd in line with the arbitration award passed in 2017.

Reliance Infrastructure-promoted Delhi Airport Metro Express Pvt Ltd (DAMEPL) had moved the Delhi High Court seeking enforcement of an arbitration award of 2017 passed in its favour relating to Delhi Airport Metro Express Line.

The arbitration award “cannot be allowed to remain as a paper award,” the high court said in its judgment rendered on March 10. The court asked DMRC to divert funds available with it under various funds and accounts towards execution of the arbitration award. DMRC can seek permission from the central government or raise loans to discharge this obligation, the high court said.

After factoring in the amount of Rs 1,678 crore already paid by DMRC, the dues claimed by Reliance Infra, including interest per the arbitration award, stood at Rs 6,330 crore.

The high court has granted DMRC two weeks’ time to pay a sum of Rs 824.10 to Reliance Infra’s DAMEPL. The remainder of the amount owed towards the decreed amount is required to be paid by DMRC in two equal instalments to be fulfilled on or before April 30 and May 31 respectively.

The plea filed by Reliance Infra’s arm before the high court had sought a direction for DMRC to deposit the amount of over Rs 6,330 crore in an escrow account in line with the arbitral award.

DMRC, however, had challenged the amount claimed by Reliance Infra and said that after making payments, it owed around Rs 3,500 crore to Reliance Infra.

In February this year, when the high court concluded hearing in the case and reserved its judgment, DMRC undertook to deposit a sum of Rs 600 crore in the escrow account forthwith towards the decreed amount payment. This undertaking was taken on record by the high court.

For the remainder of the money that DMRC claims to owe, the public sector undertaking had sought for extension in time for repayment.

DMRC and Reliance Infra's DAMEPL had entered into a contract in 2008 for the Delhi Airport Metro Express Line. DAMEPL terminated the concession agreement with DMRC in 2012 on the grounds that the DMRC was not fulfilling certain requirements pertaining to curing construction defects within the stipulated time.

DMRC invoked arbitration thereafter and the award was passed in favour of DAMEPL. This award was upheld by the Supreme Court. Subsequently, the Delhi High Court was moved for the execution of the arbitral award.