Delhi: Order on DAMEPL’s plea seeking interest reserved

A bench of justices L Nageswara Rao and BR Gavai reserved judgment after hearing senior advocate Harish Salve representing DAMEPL, which is operated by a consortium led by Anil Ambani’s Reliance Infrastructure Limited, and senior advocate Parag Tripathi for DMRC.

The Supreme Court on Friday reserved orders on a petition filed by the Delhi Airport Metro Express Private Limited (DAMEPL) challenging a Delhi high court order refusing their claim for substantial interest on a 2017 arbitral award worth over ₹4,600 crore against the Delhi Metro Rail Corporation (DMRC).

The DAMEPL in its petition filed through advocate EC Agrawala said, “It (high court) erroneously rejects computation of post-award interest by DAMEPL on ‘sums awarded’ since it includes the pre-award interest.” (HT archive)

A bench of justices L Nageswara Rao and BR Gavai reserved judgment after hearing senior advocate Harish Salve representing DAMEPL, which is operated by a consortium led by Anil Ambani’s Reliance Infrastructure Limited, and senior advocate Parag Tripathi for DMRC.

DAMEPL had gone to the Delhi high court to get the award executed, resulting in an order being passed on March 10. The high court directed DMRC to make payment of the remainder sum in terms of the May 11, 2017 arbitral award in two instalments by the end of May. However, DAMEPL claimed that the order “erroneously” rejected the decree holder claim for the outstanding interest to be added to the principal amount.

The DAMEPL in its petition filed through advocate EC Agrawala said, “It (high court) erroneously rejects computation of post-award interest by DAMEPL on ‘sums awarded’ since it includes the pre-award interest.”

DMRC has so far paid a sum of ₹2,278.42 crore, leaving a deficit of ₹5774.79 crore, the petition filed by DAMEPL said.

DMRC opposed this demand made by DAMEPL and said that the sum payable on the date of the award cannot include the component of interest. According to Tripathi, the DMRC is supposed to pay the termination payment within a month, and interest will accrue only on account of delayed payment. He said that the addition of interest component will swell up the award by over ₹1,236 crore.

The dispute between the two companies has its origin in an agreement signed by DMRC with DAMEPL in August 2008 for the design, installation, commissioning, operation and maintenance of the 22.7-kilometre Airport Metro Express line. As part of the agreement, DMRC was to carry out the design and construction of the project structure. In October 2012, the consortium of Reliance Infrastructure and Construcciones y Auxiliar de Ferrocarriles SA terminated the concession agreement citing failure of DMRC to cure defects in the structure supporting the Airport line.

DMRC invoked arbitration and the award was passed in favour of DAMEPL. But with payment getting delayed, DAMEPL claimed it had to settle payments with the banks. The consortium claimed that for running the Airport Express line project, it had invested ₹2,802 crore, of which ₹2,117 crore was funded by a consortium of banks.

The Supreme Court had upheld the award in September last year and had directed the Delhi high court for executing the award.