Reliance Infra wins Rs. 2950 crore in arbitration against DMRC
The Delhi Airport Metro Express Private Limited, an arm of Reliance Infrastructure has been awarded Rs. 2950 crore in an arbitration settlement against DMRC. RInfra welcomed the move saying Rs. 1,900 crore of the total sum will go towards debt repayment to eight public sector banks. The panel, nominated by the DMRC, unanimously awarded the settlement to DAMEPL.
Part of settlement goes for Reliance's metro investment
A statement issued by Reliance Infrastructure said, "RInfra to receive Rs. 1,050 crore that it had invested in the special purpose vehicle of metro line. We welcome the award and hope it will encourage private sector to participate in the nation building process."
What was the arbitration about?
DAMEPL was awarded a contract to work to run the DMRC's Airport Express Line. However, DAMEPL walked out of the agreement, saying "the civil structure was defective and posed a risk to people and property." DMRC terminated the contract, and had to pay DAMEPL concessions for material losses incurred in the project. The case was under arbitration for over 3 years.
DMRC has to pay despite challenging order
The Cabinet Committee on Economic Affairs (CCEA) approved guidelines issued by the NITI Aayog last year, which says PSUs must pay 75% of the award amount (Rs. 2210 crore) against bank guarantees even if they propose to challenge the arbitration.
