New Delhi: Reliance Infrastructure (RInfra) on Thursday said an arbitral tribunal has awarded its arm Delhi Airport Metro Express Private Limited (DAMEPL) a compensation of Rs2,950 crore against the Delhi Metro Rail Corporation (DMRC).
“DAMEPL, a subsidiary of RInfra, today announced that it has been awarded compensation of Rs2,950 crore by a three-member arbitral tribunal in a unanimous decision. The tribunal was constituted from a panel nominated by Delhi Metro Rail Corporation (DMRC),” Reliance Infrastructure said in a statement. RInfra said it will pay lenders’ debt of Rs1,900 crore from the compensation award. The award to RInfra has been granted on the basis of termination provisions of the concession agreement where the arbitration tribunal has held termination by DAMEPL as valid.
The compensation covers damage as a result of a breach by DMRC of its obligations under the concession agreement and material adverse effect on the ability of DAMEPL to perform its obligations under the concession pact. Welcoming the award, a RInfra spokesperson said, “Reliance Infrastructure participated in PPP model in the metro sector to lead the metro movement in the country through PPP, but unfortunately had to terminate the agreement. We welcome the award and hope it will encourage private sector to participate in the nation building process.”
The three-member arbitration tribunal, formed out of a DMRC nominated panel as per the concession agreement in September 2013, gave its award in May 2017 after hearing the case for about three-and-a-half years. The statement said that after the tribunal heard the submission made by both the parties and after detailed proceedings in 68 hearings, it has issued its final order. Under guidelines approved by the cabinet committee on economic affairs (CCEA) issued by Niti Ayog last year, PSUs are expected to pay 75% of the award amount against bank guarantee even if they propose to challenge the arbitral award.
“Therefore, RInfra is expected to get Rs2,210 crore as per above guidelines against bank guarantee in case DMRC proposes to challenge the award,” the statement said. It said its consolidated net debt will reduce by Rs2,950 crore.
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.