Supreme Court asks DHC to execute ₹7,200 cr arbitration award of Delhi Metro-RInfra case

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Supreme Court asks DHC to execute ₹7,200 cr arbitration award of Delhi Metro-RInfra case

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New Delhi, India (Urban Transport News): The Supreme Court of India on January 24, 2022, directed the Delhi High Court (DHC) not to further delay the execution of an award of more than 7,200 crore payable by the Delhi Metro Rail Corporation (DMRC) to Delhi Metro Airport Express Private Limited (DMAEPL) – a consortium headed by Reliance Infrastructure Limited (RInfra) which operated the Delhi Airport Metro Express till 2012.

DAMEPL the Delhi high court on September 12, 2021, for the execution of the award passed by the arbitration court but approached of delaying tactics by Delhi Metro Rail Corporation Limited (DMRC). On eight occasions, the petition was listed and on January 11, 2022, the Delhi High Court posted the matter to March 29, 2022. The DAMEPL came to the Supreme Court challenging this order for delaying the execution of the award intentioanlly by DMRC.

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A double bench of justices L Nageswara Rao and BR Gavai, while disposing of the petition directed both parties to appear before the Delhi High Court on January 31, 2022, and requested for early disposal of the execution proceedings.

“Without commenting on the submission of either side we are of the opinion that hearing of the execution application does not brook any further delay…. We request the high court to dispose of the execution application without any further delay as a result of delay is detrimental to the petitioner and respondent (DMRC),” said the bench.

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Senior advocate Mukul Rohatgi who appeared for DAMEPL informed the bench that so far, only a token sum of Rs 1,000 crore has been paid by DMRC on December 8, 2022, and as of January 11, 2022, the sum recoverable from DMRC is Rs 6,268.87 crore. He also pointed out that his client DAMEPL is not willing to settle the matter out of court with DMRC and urged that a deadline should be set for DMRC to make the payment without delay.

Opposing DMRC’s excuses, the bench said, “Who is to benefit from the pendency of these proceedings. You cannot compel a party to compromise. Now that they have disagreed to settle, we will request the high court to take up the matter at the earliest.”

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In their petition before the high court, the DAMEPL had stated that the total decree amount payable by DMRC was Rs 7,045 crore as of September 10, 2021. Further, the DAMEPL in its petition before the Apex court said that delay of every single day was resulting in incremental daily interest on the decreed sum. Between September 10, 2021, and January 11, 2022, this amount cumulatively stands at Rs 223.46 crore.

DMRC had entered into an agreement with DAMEPL (a joint venture of Reliance Infrastructure Limited and Construcciones y Auxiliar de Ferrocarrilles SA) in August 2008 for the design, installation, commissioning, operation and maintenance of the 22.7 km Airport Metro Express Line from New Delhi Railway Station to Dwarka Sector 21 via Indira Gandhi International Airport. The agreement in the nature of public-private partnership (PPP) required DMRC to undertake the design and construction of a basic civil structure for the project. Present Managing Director of DMRC, Mangu Singh was the project director of the Airport Express line under him the entire civil work was executed.

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In May 2012, DAEMPL had problems in design and quality in the installation of viaduct bearing that was denied by DMRC. A joint inspection committee was set up that gave its report in July 2012. This was followed by another letter by DAMEPL, giving 90 days for DMRC to cure the defects. On completion of 90 days, DAMEPL issued a notice terminating the agreement on October 8, 2012, accusing DMRC of defaulting on the agreement. DMRC, however, said that it had been carried out the required rectifications.

With the HC ordering the matter to be listed on March 29, the petition said, “The high court instead of executing the decree by attaching the funds to the tune of Rs 6,208.03 crore admittedly available with the DMRC and lying in its various bank accounts towards partial satisfaction of the decretal amounts payable under the Award, embarked on a journey of acting as a conciliation court.”

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While the dispute between the parties was pending before the arbitral tribunal, DMRC restarted the line after obtaining a certificate from the commissioner of metro rail safety on January 18, 2013.

The tribunal undertook a detailed enquiry into all aspects and found as many as 1,551 cracks in 367 girders and 80 girders with twists varying between 10 to 20 mm. The tribunal was of the opinion that these defects adversely impacted the integrity of the structure. As effective steps were not taken within the cure period of 90 days, the tribunal held that DMRC was in breach of the concession agreement.

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The Supreme Court in their September 9, 2021 order upheld the order of the single judge of the high court, said, “It cannot be said that the view of the tribunal is perverse. Therefore, we do not concur with the high court’s opinion that the award of the tribunal on the legality of the termination notice is vitiated due to the vice of perversity.”

On November 23, 2021, Supreme Court had dismissed the review petition filed by DMRC, making the judgment final for execution.

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