Delhi Metro Rail Corporation (DMRC) is directed to pay Rs 2,950 crore plus interest upto the date of payment to Reliance Infrastructure (R-Infra)'s subsidiary, Delhi Airport Metro Express (DAMEPL).
The Supreme Court (SC) upheld the arbitral award in favour of R-Infra's subsidiary DAMEPL. DMRC is directed to pay damages of Rs 2,950 crore plus interest upto the date of payment to DAMEPL."The proceeds from the arbitral award to be utilized for debt reduction," R-Infra said in a statement.
In 2008, an agreement was entered into between DMRC and R-Infra's special purpose entity DAMEPL for design, installation, commissioning, operation and maintenance of Airport Metro Express Line.
In 2012, DAMEPL complained of faulty design and quality in the installation of viaduct bearings. A notice was issued by DAMEPL asking DMRC to cure the defects in DMRC's works within a period of 90 days from the date of the notice, failing which it shall be treated as a breach of the agreement.
DAMEPL then issued a notice terminating the concession agreement. DMRC filed for arbitration claiming that the termination notice issued by DAMEPL was illegal and asked for compensation of Rs 3,173 crore with an interest of 18% per annum.
On Thursday (10 September), the Supreme Court reportedly said, "the appeal filed by DAMEPL is allowed and the judgment of the Division Bench of the High Court is set aside." "The conclusion of the Division Bench that the award of the Arbitral Tribunal suffers from patent illegality and shocks the conscience of the court is held to be erroneous," it reportedly added.
On a consolidated basis, R-Infra reported a net loss of Rs 87.50 crore in Q1 June 2021 as compared to a net loss of Rs 290.07 crore in Q1 June 2020. Net sales jumped 22.7% to Rs 4,336.02 crore in Q1 June 2021 over Q1 June 2020.
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R-Infra provides Engineering and Construction (E&C) services for developing power, infrastructure, metro and road projects. The company through its SPVs has executed a portfolio of infrastructure projects such as a metro rail project in Mumbai on build, own, operate and transfer (BOOT) basis; nine road projects on build, operate and transfer (BOT) basis.
Shares of R-Infra hit an upper circuit of 5% to settle at Rs 74.15 on Thursday, 9 September 2021. The domestic stock exchanges were closed on Friday, 10 September 2021, on account of Ganesh Chaturthi.
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