Mumbai: Reliance Group chairman Anil Ambani today hit out at government agencies, which owe his debt-laden Reliance Infrastructure Ltd (RInfra) payouts awarded in arbitration.

“It is an unfortunate fact of doing business in India that despite amendments to the Arbitration (and Conciliation) Act by the central government and clarity from the Supreme court in multiple judgements, many government entities continue to drag their feet on arbitration award payouts to the detriment of shareholder interest. A stark example of this is the Delhi Metro Rail Corporation’s (DMRC) appeal in the Delhi Metro arbitration which (RInfra) has won," Ambani told shareholders at RInfra’s annual general meeting today.

RInfra has in 2012 said DMRC had failed to fix civic structural defects in the Delhi Metro airport line project. RInfra moved to terminate the concession agreements and won 2,950 crore in arbitral award.

RInfra built the Delhi Metro airport line for DMRC.

“(The decision) took no less than 68 hearings lasting almost four years, and we also won an appeal at the Delhi high court, which took seven months to deliver the judgement. This matter has now been pending before a judicial bench for an additional seven months," Ambani said. “So five-and-a-half years since we went into arbitration and one-and-a-half years since we won, the payout is still nowhere to be seen."

“This creates an asymmetry where we as a corporate entity remain answerable to all lenders for loan and interest repayment, but the defaulting entities have no accountability and nothing to answer for."

According to Ambani, RInfra has already won 6,300 crore in arbitration awards against DMRC, National Highway Authority of India (NHAI) and the Goa government but those payouts are still awaited.

“We have another 5,000 crore worth of regulatory assets under approval related to the Mumbai power business. In addition, there are further arbitrations of 8,000 crore under advanced stages of approval, comprising 5,300 crore in EPC sector, 1,700 crore for Mumbai Metro and 1,000 crore in the roads sector," Ambani said.

As on 31 August, RInfra debt stood at 22,000 crore. Ambani brought this down to the current level of 7,500 crore, a steep debt reduction of 65%, by selling RInfra’s Mumbai power distribution business to the Adani Group for 18,800 crore. Ambani told shareholders and lenders that payouts from these arbitration awards would allow the company to reduce its debt burden further.

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