[ecis2016.org] The Delhi High Court has directed the Delhi Metro Rail Corporation to pay Rs 3,502.62 crores within four weeks, to Reliance Infrastructure’s subsidiary, which was operating the airport express line earlier
The Delhi High Court’s justice Sanjeev Sachdeva, on March 6, 2018, dismissed the Delhi Metro Rail Corporation’s (DMRC’s) plea against the Arbitral Tribunal’s May 2017 order, asking it to make payments to Reliance Infrastructure’s (Rinfra’s) subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL), in the case related to the airport express premium corridor. The high court allowed a separate plea of DAMEPL, the former concessionaire of the airport express line, for early payment of 75 per cent of the arbitral award in its favour. DAMEPL had sought direction to the DMRC, to deposit with the court Rs 3502.62 crores, which is 75 per cent of the total arbitral award of Rs 4,670 crores.
It had also sought to release the deposited amount to project lenders and promoters. DAMEPL had appealed for early payment of the award, claiming it was paying Rs 65 lakhs per day to its lenders, comprising public and other banks, since the termination of its agreement with the DMRC to run the Airport Metro line.
Allowing their plea, the high court said, “DAMEPL has sought direction for release of the deposited amount to the project lenders and promoters who had financed the project. The prayer is allowed. However, instead of depositing the said amount in court, the Delhi Metro is directed to deposit the amount, along with interest, as awarded by the Arbitral Tribunal, directly with the project lenders. The said amount be deposited in the escrow account maintained with the project lenders, within a period of four weeks from today,” it added.
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After the judgement, a Rinfra spokesperson said, “Now that the Delhi High Court has upheld the award by the arbitration tribunal, we expect the compensation to be paid expeditiously, which we shall utilise to retire the outstanding debt of Rinfra and DAMEPL.” The concessionaire had contended in court that it had been paying Rs 18-20 crores a month since July 2013, for servicing the debt and had already shelled out over Rs 1,070 crores towards payment of interest, with the initial capital remaining outstanding. The DMRC, on the other hand, had opposed maintainability of the plea for enforcement of the award, which was granted in favour of the concessionaire by a unanimous decision of a three-member arbitration tribunal, on May 11, 2017.
According to DAMEPL’s plea, the concession agreement was signed by the two on August 25, 2008. Under the agreement, the DMRC was to carry out civil works, excluding at the depot and the balance, including the project system works, were to be executed by DAMEPL, the plea had said. The Airport Express line was commissioned on February 23, 2011, after an investment of Rs 2,885 crores, funded by DAMEPL’s promoters’ fund, banks and financial institutions.
DAMEPL had said it had terminated the concession agreement, as the DMRC had not cured some defects in the express line, within 90 days of the notice issued by it. According to the petition, the agreement was with effect from January 1, 2013 and the project was handed over to the DMRC on June 30, 2013. Till handing over of the project, DAMEPL had operated the line as a deemed agent of the DMRC, it had said. Arbitration was entered into in August 2013 after efforts to amicably resolve the issues did not yield results.
DAMEPL is a joint venture of Rinfra and a Spanish construction company, Construcciones Y Auxiliar De Ferrocarriles, with a shareholding of 95 and five per cent, respectively.
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