DMRC told to give timeline for paying ₹4,500 crore award

An arbitral tribunal in its May 2017 award had ruled in favour of DAMEPL, which had pulled out from running the Airport Express metro line over safety issues, and accepted its claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run

The Supreme Court on Monday told the Centre that the five-year delay in execution of an arbitral award by Delhi Metro Rail Corporation (DMRC) does not augur well with its plans on making the country a hub of international arbitration.

The Supreme Court upheld the award in September last year, but when the payment was delayed, DAMEPL approached the apex court saying it was being made to run from pillar to post for getting its legitimate dues. (HT Archive)

An arbitral tribunal in its May 2017 award had ruled in favour of Delhi Airport Metro Express Private Limited (DAMEPL), which had pulled out from running the Airport Express metro line over safety issues, and accepted its claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run.

The Supreme Court upheld the award in September last year, but when the payment was delayed, DAMEPL approached the apex court saying it was being made to run from pillar to post for getting its legitimate dues.

A bench of justices BR Gavai and Vikram Nath said, “On one hand, there are public speeches on making India an international arbitration hub and then we find there is no enforcement of award (by international arbitral tribunal). If you really want India to become an international arbitration hub, it has to start with you (DMRC).”

Attorney general R Venkatramani, who appeared for DMRC, sought to argue on merits and even termed the DAMEPL to be a “paper company”. The bench took objection to this remark and said, “We do not expect this from the Attorney General. It is contemptuous. A three-judge bench of this Court has approved the (arbitral) award.”

The AG clarified that his endeavour was not to question the SC judgment and sought time to take instructions. “A sum of ₹2,700 crore has been paid so far. The interest is mounting every day,” Venkatramani said.

Senior advocate Harish Salve representing DAMEPL told the court, “The DMRC is yet to pay dues to the tune of ₹4500 crore.” The bench asked AG to suggest by Wednesday how much time it will require to pay the balance amount under the award.

The dispute between the two companies originated from an agreement entered by DMRC with DAMEPL in August 2008 for the design, installation, commissioning, operation and maintenance of the Metro’s Airport Express Line. The agreement required DMRC to carry out the design and construction of the project structure. On October 8, 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.

DAMEPL in its plea before the top court had challenged the extensions granted to DMRC by the Delhi high court for execute the award. On November 17, high court posted the matter in December. Meanwhile, DAMEPL claimed that it was under pressure to return the loans taken from banks and financial institutions.

“As on the present date, over admitted amount of ₹7010.08 crore, less ₹2599.17 crore (already paid), ₹4410. 91 crore is not paid by DMRC,” said DAMEPL in its plea filed through advocate EC Agarwala. “The petitioner got entitled to termination payment on August 7, 2013 as per Article 29 of the Concession Agreement (signed with DMRC). For more than nine years, petitioner has been running from pillar to post to seek recovery of its monies.”