Delhi HC Asks DMRC To Take Clear Instructions On Paying Arbitral Award To DAMEPL

The Delhi High Court Monday asked the Delhi Metro Rail Corporation (DMRC) counsel to take clear instructions on how it will pay the amount of the arbitral award of over Rs 4,600 crore to Reliance Infrastructure’s subsidiary DAMEPL or else face an “unpleasant order”.

Justice Suresh Kumar Kait preponed the date of hearing relating to the execution of the arbitral award passed against the DMRC, from March 29 to February 14.

“Mr. (Parag) Tripathi (counsel for DMRC), on the next date of hearing, I don’t want to hear anything here or there. You have to take clear instructions on how to pay the amount. This liability, that liability will not work otherwise you will face an unpleasant order,” the judge said.

DMRC counsel assured the court that they will not seek any further accommodation.
The high court was adjudicating an early hearing application filed by DAMEPL, in pursuance of the Supreme Court’s January 24 order.

"The parties are directed to appear before the high court on January 31 and seek for advancing the date of hearing. We request the high court to take up the matter at the earliest and dispose of the execution application without any further delay, as consequences of pendency of this application are detrimental to the interest of the petitioner as well as the respondent," the apex court had said in its order while disposing of the appeal filed by DAMEPL challenging the high court’s January 11 order.

On January 11, the high court had pulled up decree-holder DAMEPL for playing “hide and seek” with the court and holding out-of-court communications with judgement debtor DMRC to settle the dispute while arguing before the court that it was not ready to accept the proposal made by the PSU.

Reliance Infrastructure's subsidiary had filed an application claiming that DMRC was deliberately trying to delay the execution of the over Rs 4,600 crore arbitral award against it, which was costing the taxpayer a daily interest of almost Rs 1.75 crore.

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

In December last year, DAMEPL's counsel had told the court that as per DMRC's affidavit, it had over Rs 5,800 crore in its bank accounts as of December 17, 2021, with over Rs 1,642 crore being its earning and over Rs 2,400 crore and Rs 1,700 crore being its project allocation fund and deposit fund, respectively.

DMRC had stated that since the corporation was facing a “financial crunch”, undertaking a “sudden liability” would impact public interest and authorities were therefore working out a solution.

It had earlier told the court that it would deposit Rs 1,000 crore in favour of DAMEPL in an escrow account.

The award pertained to a concession agreement between the two entities, which was signed on August 25, 2008. Under the agreement, DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, were to be executed by DAMEPL, a joint venture of R-Infra and a Spanish construction company -- Construcciones Y Auxiliar De Ferrocarriles -- with a shareholding of 95 and five per cent respectively.

The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore, funded by the DAMEPL promoters' fund, banks, and financial institutions.

In November 2021, the Supreme Court had dismissed DMRC's plea seeking a review of its judgement which upheld the 2017 arbitration award in favour of DAMEPL, enforceable against it.