SC reserves order on DMRC plea against DAMEPL
Supreme Court reserves orders on DMRC's curative petition challenging ₹8,000 crore arbitral award to DAMEPL. Arguments concluded, decision awaited.
The Supreme Court on Tuesday reserved orders on a curative petition filed by the Delhi Metro Rail Corporation (DMRC) challenging an arbitral award directing it to pay Reliance Infrastructure subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL), around ₹8,000 crore.
A bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud concluded arguments on the plea filed by DMRC which had lost its appeal challenging the award in the top court in September 2021. Following the dismissal, DAMEPL approached the Delhi high court to execute the award. The top court had in August last year asked the high court to defer the proceedings till a decision on the curative plea was made.
The bench, also comprising justices BR Gavai and Surya Kant, heard the matter for three days with DMRC objecting to DAMEPL walking out of the agreement in October 2012. DAMEPL, a subsidiary of the Anil Ambani-owned RInfra Limited, had raised safety issues in continuing with the contract to operate the 22.7km Airport Metro Express line, following which DMRC cancelled the contract in October 2012.
An arbitral tribunal award passed on 11 May 2017, was invoked by DMRC against the consortium of Reliance Energy Ltd (renamed Reliance Infrastructure) and Construcciones y Auxiliar de Ferrocarriles SA. DAMEPL cited the failure of DMRC to cure defects in the structure supporting the Airport Metro Express line.
Arguing for DMRC, attorney general R Venkataramani and senior advocate KK Venugopal pointed out that after the termination of the contract, the airport line has been successfully operated by DMRC since July 2013. It was further argued that the defects, if any, were to be seen by the commissioner of rail safety and DAMEPL was trying to shift the blame on DMRC as it found it difficult to generate profits from the running of the train. Under the contract signed between the two parties, DAMEPL had to pay ₹51 crore per annum which would be increased by 5% every year.
DMRC further insisted that DAMEPL had to first issue a letter intimating termination of contract giving sufficient time for DMRC to cure the defects.
DAMEPL was represented by senior advocates Harish Salve and Kapil Sibal who pointed out that all these points did not form part of the curative petition where the court has limited jurisdiction. Salve said that new points were being argued in the curative petition that sought to question the award itself. He pointed out that the principal amount to be paid under the award was ₹2,945.55 crore and with interest, the amount roughly crossed ₹7,900 crore.
DMRC had earlier claimed that it deposited ₹1,678.42 crore out of its total liability. The arbitral tribunal undertook a detailed inquiry and found as many as 1,551 cracks in 367 girders and 80 girders with twists varying between 10 to 20 mm. The tribunal said these defects adversely impacted the integrity of the structure. As effective steps were not taken within the 90-day cure period, the tribunal held that DMRC breached the concession agreement.