2 min read.Updated: 07 Mar 2018, 01:48 AM ISTAditi Singh
Delhi HC further directs DMRC to deposit Rs3,502.62 crore being 75% of the amount awarded under the arbitral award directly with project lenders
New Delhi: Delhi high court on Tuesday upheld a May 2017 arbitral award against Delhi Metro Rail Corp. Ltd (DMRC), directing it to pay Rs2,950 crore as compensation, along with interest, to Delhi Airport Metro Express Pvt. Ltd (DAMEPL), a unit of Reliance Infrastructure Ltd (RInfra) for breach of provisions of a ‘concession agreement’ between the two entities for construction, operation and maintenance of the Airport Metro Express Line project.
The project was a High Speed Metro Rail Line and intended to operate between New Delhi and Dwarka Sector 21 via IGI Airport Terminal 3, over a stretch of 23km.
Justice Sanjeev Sachdeva, in its judgement, further directed DMRC to deposit Rs3,502.62 crore being 75% of the amount awarded under the arbitral award directly with project lenders. The amount would be deposited in the escrow account maintained with project lenders in four weeks.
A Reliance Infra spokesperson said, “Now that the Hon’ble Delhi High Court has upheld the award by the arbitration tribunal, we expect the compensation to be paid expeditiously, which we shall utilize to retire the outstanding debt of RInfra and DAMEPL."
According to its media release, Reliance Infrastructure stands to get Rs5,060 crore from the award.
After winning the competitive bidding for the metro project in 2008, Reliance Energy CAF, a joint venture between Reliance Energy (now Reliance Infrastructure Ltd) and Spanish rolling stock firm CAF, had formed a special purpose vehicle (SPV) DAMEPL and had entered into a concession pact with DMRC for the implementation of the project.
The pact was terminated by DAMEPL on 8 October 2012 after DMRC failed to cure certain defects in the civil structure of the project, which “severely impaired the performance of the obligations of DAMEPL under the Concession Agreement"
Subsequently, DAMEPL invoked Article 29.5.1 of the concession agreement upon DMRC to make payment of a termination amount’.
DAMEPL further invoked provisions of a tripartite escrow agreement, executed between the lenders of the project, DMRC and DAMEPL, asking DMRC to deposit the termination payments as well as all revenues derived from the project operations collected by it in accordance with the concession agreement into an escrow account.
After a failed conciliation attempt, an arbitral tribunal was constituted which passed an award on 11 May 2017 directing DMRC to compensate DAMEPL for causing ‘material adverse effect’ on DAMEPL’s capacity to operate the project in accordance with the concession agreement.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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