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Law: SC junks its ruling, gives relief to Delhi Metro against Reliance Infra

Law: SC junks its ruling, gives relief to Delhi Metro against Reliance Infra

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Virendra Pandit

New Delhi: In a rare move, the Supreme Court of India on Wednesday lifted a Rs. 4,700 crore burden off the Delhi Metro Rail Corporation (DMRC), criticizing its own 2021 verdict that saddled a public utility with an exorbitant amount that has now swelled to nearly Rs. 8,000 crore.

A three-judge Bench of the apex court, headed by Chief Justice of India D. Y. Chandrachud, said the 2021 judgment was “perverse and patently illegal,” the media reported.

The 2021 SC judgment had upheld a Rs. 4,700 crore arbitral award, passed by the Delhi High Court in favor of the Delhi Airport Metro Express Pvt Ltd (DAMEPL), a subsidiary of the Anil Ambani-led Reliance Infrastructure Ltd.

“The amounts deposited by DMRC shall be refunded. Any amount paid by the petitioner as part of coercive action has to be refunded,” the apex court said on Wednesday.

While the Supreme Court permitted DMRC to file a curative petition, it also cautioned that this should not be used to open floodgates for such petitions. “In the specific facts and circumstances of the case, interference by the Supreme Court had led to a grave miscarriage of justice,” the bench said.

In February 2024, the SC bench reserved its verdict on DMRC’s curative plea against dismissing its review petition challenging the arbitral award in favor of DAMEPL.

It all started in 2008 when the two parties signed an agreement for the design, installation, commissioning, operation, and maintenance of the Airport Metro Express Line, running from New Delhi Railway Station to Sector 21 Dwarka for a 30-year term. This line was to run through the Delhi Airport.

While DMRC handled the construction of all civil structures, DAMEPL was responsible for all system works. However, in July 2012, DAMEPL suspended operations due to defects found in the viaduct and issued a notice to DMRC, the party in charge of this aspect, to fix the problem.

Although DAMEPL restarted the line in January 2013, it withdrew from the project within five months, prompting the DMRC to invoke the arbitration clause in the contract.

The arbitral tribunal later ruled in favor of DAMEPL, instructing DMRC to pay Rs 2,782.33 crore in 2017. After this, DMRC moved to the Delhi High Court, where a single-judge bench initially dismissed the petition. However, a division bench later overturned the arbitral tribunal’s decision, deeming it ‘in conflict with the public policy of India.’

Then, the DAMEPL approached the Supreme Court, which, in 2021, ruled that arbitral tribunal awards are not subject to challenge and upheld the award.

The original arbitral award had grown to Rs 7,045.41 crore by the end of 2021 when DAMEPL asked Delhi HC to enforce the 2017 order.

By then, DMRC had paid Rs 1,000 crore and informed the court that it was unable to pay the full arbitral award, suggesting that the Delhi government and the Ministry of Housing and Urban Affairs should pay.

As of today, the amount has increased to Rs 8,000 crore.


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