Delhi high court slams parallel talks in Metro case
Justice Suresh Kait said DAMEPL, a subsidiary of Reliance Infrastructure, has not approached the court with “clean hands” while asking its counsel not to waste precious judicial time, if the company intended to settle the matter outside the court
The Delhi high court on Tuesday pulled up Delhi Airport Metro Express Private Limited (DAMEPL) for carrying out a “parallel settlement discussions” with Delhi Metro Rail Corporation (DMRC) relating to execution of the more than ₹4,600 crore arbitral award, and said that the former was playing hide and seek with the court.
Justice Suresh Kait said DAMEPL, a subsidiary of Reliance Infrastructure, has not approached the court with “clean hands” while asking its counsel not to waste precious judicial time, if the company intended to settle the matter outside the court.
“Since the petitioner’s (DAMEPL) counsel is making submission before the court and simultaneously communicating with the judgment debtor (DMRC) to settle the dispute in this manner... In this fashion the decree holder is not coming to court with clean hands. Therefore, re-notify on March 29,” the court said while adjourning DAMEPL’s plea seeking execution of the multi-crore arbitral award it had won against DMRC.
The court also observed that DAMEPL was not fair to the court despite having won the arbitral award. The judge noted that pursuant to its December 22, 2021 order, DMRC has filed an affidavit furnishing the details of its bank accounts along with the balance amount.
The court was hearing an application by the Reliance Infrastructure’s subsidiary which was filed in the ongoing proceedings before the high court, claiming that DMRC was deliberately trying to delay the execution of the over ₹4,600 crore arbitral award against it.
On Tuesday, senior advocate Parag Tripathi, for DMRC, submitted that it was ready to take over the liabilities of Reliance Infrastructure subsidiary to the extent of the award money as it would be in a better position to negotiate with the lender banks, however, the offer was turned down by DAMEPL.
He informed the court that on December 30, 2021, DAMEPL had written a letter to DMRC, asking if it was ready to take over its debt which was to be paid by DAMEPL and Reliance Infrastructure to their lenders. DMRC responded to the letter saying that DAMEPL should first disclose the full amount of its liabilities, he submitted.
To this, Justice Kait said DAMEPL was taking a different stand in the court while it was writing letters to DMRC to settle the dispute.
“If you are settling the dispute outside the court, why are you wasting the court’s time? Don’t communicate with them when the matter is before the court. If you want to, then withdraw the case. I will throw out your case,” the judge said.
Appearing for DAMEPL, advocate Prateek Seksaria, argued that the company was exercising its legal right in the court by seeking execution of the decree passed in its favour and claimed that DMRC was not disclosing the whole issue.
“DMRC was calling and holding meetings with my lenders on outstanding loans to banks in my absence. You cannot meet my lenders behind my back. If you want to meet them then take over my entire liabilities and have meetings with the lenders. If we arrive at a settlement, we will inform the court. I was against the move because they met my lenders without informing me so I wrote a letter to DMRC,” he contended.
The counsel also said that the offer given by DMRC was not acceptable and DAMEPL does not want to settle the dispute in this fashion.
The matter will now be heard in March.
DAMEPL and DMRC are locking horns in the former’s execution plea for the arbitral award won by it against the corporation.
The consortium of Reliance Energy Limited (renamed as Reliance Infrastructure Limited) and M/s Construcciones y Auxiliar de Ferrocarriles, SA terminated the Concession Agreement in October 2012 citing failure of DMRC to cure defects in the structure supporting the Airport Metro Express Line. DMRC invoked the arbitration clause of its contract with the consortium.
The concession agreement between the two was signed on August 25, 2008. Under the agreement, DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, were to be executed by DAMEPL, a joint venture of Rinfra and a Spanish construction company -- Construcciones Y Auxiliar De Ferrocarriles -- with a shareholding of 95 and five per cent respectively.
In 2017, the Arbitral Tribunal awarded damages to Reliance Infra, an award upheld by a single-judge bench of the Delhi high court in 2018. A division bench of the same court set aside the award in 2019 after which Reliance Infra approached the top court.
In September this year, the apex court set aside the division bench’s judgment of January 15, 2019 order and upheld the arbitral award in favour of DAMEPL, saying that there was a disturbing tendency of courts setting aside arbitral awards.
In November, the Supreme Court had dismissed DMRC’s plea seeking a review of its judgment which upheld the 2017 arbitration award in favour of DAMEPL, enforceable against it. The apex court on September 9 had upheld the arbitration award enforceable against DMRC.
The DMRC had stated that since the corporation was facing a “financial crunch”, undertaking a “sudden liability” would impact public interest and authorities were, therefore, working out a solution. It had also claimed that the amount liable to be paid was approximately ₹5,000 crore which was lesser than DAMEPL’s claim.
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