Supreme Court rules in favor of DMRC against Rs 8,000 cr arbitral award to Reliance firm

SC allows DMRC's plea against arbitral award of Rs 8,000 cr in favour of Reliance firm

In a major relief to the DMRC, the Supreme Court on Wednesday set aside its own judgement and held that the PSU firm was not obliged to pay over Rs 8,000 crore to the Delhi Airport Metro Express Private Ltd, a Reliance Infrastructure firm, in pursuance of a 2017 arbitral award.

Allowing the curative plea of the Delhi Metro Rail Corporation (DMRC) against the 2021 judgement, a special bench headed by Chief Justice D Y Chandrachud held that the top court erred in setting aside the Delhi High Court verdict.

A division bench of the Delhi High Court, in 2019, had set aside the arbitral award passed against the DMRC.

''By setting aside the Delhi High Court judgement, this court (SC) restored a patently illegal award which saddled a public utility with an exorbitant liability,'' said the bench which also comprised justices B R Gavai and Surya Kant.

The bench said the earlier SC verdicts in the case resulted in a ''miscarriage of justice'' and warranted it to exercise the curative jurisdiction.

The verdict said the amounts deposited by the DMRC till date shall be refunded and restored the parties to their position in which they were on the date of pronouncement of the Delhi High Court verdict.

The detailed judgement is awaited.

The 2017 arbitral award was to the tune of Rs 7,200 crore and the amount along with the interest and other charges swelled up to over Rs 8,000 crore.

The top court, on February 20, had reserved its verdict on the curative plea of the DMRC against the dismissal of its review petition against the arbitral award to the tune of Rs 8,000 crore in favour of the DAMEPL.

The Anil Ambani-owned Reliance Infrastructure Limited, the flagship firm of DAMEPL had termed the curative plea of the DMRC against the top court's decisions as the "whole-sale trial by ambush".

The appeal and the review petitions of the DMRC, challenging the arbitral award asking it to pay Rs 8,000 crore to DAMEPL, were dismissed by the top court earlier.

The DMRC challenged the arbitral award on grounds, including that the notice of October 8, 2012 issued by DAMEPL terminating the concessionaire agreement related to running the airport metro line in the national capital was "illegal".

The DMRC had filed the curative plea in August 2022 against the dismissal of its review plea by the top court in 2021.

After the dismissal of the plea of DMRC, the Reliance firm had moved the Delhi High Court seeking execution of the arbitral award.

In May 2017, an arbitral tribunal ruled in favour of the DAMEPL, which had pulled out of running the Airport Express metro line over safety issues, and accepted its claim that running the operations on the line was not viable due to structural defects in the viaduct through which the trains would pass.

Earlier, the court had noted that the total amount of the award with interest till February 14, 2022 was Rs 8,009.38 crore. Of this, a sum of Rs 1,678.42 crore has been paid by the DMRC and an amount of Rs 6,330.96 crore is still due.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)