Reliance Infrastructure Says It Has Won Rs 2,950-Crore Arbitral Award In Dispute With DMRC
The arbitration decision comes after almost four years and 68 hearings.
Reliance Infrastructure Ltd. said its subsidiary Delhi Metro Express Private Ltd. has won a Rs 2,950-crore arbitral award against the Delhi Metro Rail Corporation Ltd. (DMRC), which will help the Anil Ambani-promoted company pare debt.
The arbitral tribunal held the company’s decision to terminate its concession agreement for the Delhi Airport Metro project four years ago as valid, it said in a media statement. A three-member tribunal bench, chosen from a DMRC-nominated panel, unanimously ruled in favour of Reliance Infrastructure, the statement added.
The award will allow Reliance Infrastructure to recover the Rs 1,050 crore it has invested in the airport metro line and repay lenders’ debt worth Rs 1,900 crore. Eight public sector banks will benefit from the decision as their outstanding debt from the metro project would be paid, the release said.
Reliance Infrastructure had pulled out of its public-private partnership with DMRC for the 22.7-kilometre airport metro line in 2012, calling the Rs 5,700-crore project commercially unviable. The two parties had agreed to run it for 30 years. DMRC took over the metro line – that connects the New Delhi Railway Station to the T3 terminal of the Indira Gandhi International Airport – in 2013.
The company said it continued to repay loans that it incurred from the project to several banks, including Punjab National Bank, Axis Bank and Canara Bank, even after the DMRC takeover. The liabilities, the company argued, should be paid by DMRC as it was running the project since 2013 and collecting income from its ticketing and retail operations.
Messages sent to Mangu Singh, managing director at DMRC, didn’t elicit any response. KK Sabarwal, director-finance at DMRC, refused to comment saying he had not read the order yet.
The arbitration panel, set up in October 2012, has said that DMRC should make the payment immediately post stamp duty payments, the Reliance Infrastructure statement said.
According to Cabinet Committee of Economic Affairs-approved guidelines issued by Niti Aayog on September 2016, DMRC will have to pay at least 75 percent of the award worth Rs 2,210 crore to R-Infra against a bank guarantee even if DMRC proposes to challenge the award, the company’s statement said.