The Delhi High Court ordered the Delhi Metro Rail Corporation (DMRC) to pay Delhi Airport Metro Express Private Limited (DAMEPL) more than Rs 4,600 crore in arbitral award money together with interest in two equal payments over the course of two months.
Details about Delhi High Court orders DMRC to pay DAMEPL’s Rs 4600 cr arbitral award in two months
The first and second instalments must be paid on or by April 30 and May 31 of this year, according to the court.
In DAMEPL’s execution petition against DMRC over an arbitral verdict of more than Rs 4,600 crore in its favour, the court issued its decision.
It said the May 11, 2017 arbitral ruling has gained finality and cannot be permitted to remain as a paper award and added that judgement debtor DMRC is duty obligated to either redirect its money after seeking approval of the federal government, if necessary, or raise loans to fulfil the award.
Judge Suresh Kumar Kait noted that the DMRC had paid Rs 1678.42 crore during the pendency of these proceedings, and even on the day the execution petition’s order was reserved, the DMRC’s counsel had promised that Rs 600 crore would be put in the ESCROW account.
The high court noted in its 33-page decision that the DMRC affidavit stated that as of February 14, 2022, the total funds available with it under the headings “Total DMRC Funds,” “Total Project Funds,” and “Total Other Funds” were each equal to Rs. 1,452.10 billion, Rs. 2,681.29 billion, and Rs. 1,560 billion, respectively.
Nevertheless, according to financial information in the DMRC’s affidavit from January 10, 2022, Rs 514 crore is committed to staff salaries, medical benefits, and post-retirement benefits, and Rs 114 crore is the percentage of smart card security deposits that is refundable to passengers.
According to the court’s well-considered view, the said sum—roughly Rs 514+ Rs 114 crore—must be set aside for the aforementioned use; nevertheless, payments for the decree amount must be made from the balance found in the judgement debtor’s various bank accounts as well as under other headings.
The May 11, 2017 award has become final and cannot be allowed to remain as a paper award. As a result, the judgement debtor is required to either raise loans or divert funds that are shown to be available under various headings listed in the affidavit of February 14, 2022 in order to satisfy the award, the court ruled in dismissing the execution petition.
The court ordered that out of the Rs 1,452.10 crore in funds available under the heading “Total DMRC Funds,” Rs 628 crore be set aside for statutory expenses, and that the remaining amount be used to pay the decretal amount in part within two weeks and the balance due in two installments within two months.
The court also denied an impleadment request made by Canara Bank and Union Bank, which claimed that they owed money to the decree holder, DAMEPL, for loans totaling a sizable sum and should be paid back from DMRC’s payment of the decree’s awarded sum.
The judge said the execution petition has been filed by the decree holder against the judgement debtor for execution of May 11, 2017 arbitral award and added I find that for any outstanding dues payable by the decree holder to these applicants, separate proceedings are required to be initiated and applicants cannot be permitted to settle their scores in the present petition.
The Supreme Court requested that DMRC and DAMEPL approach the high court to hear their disagreement regarding the execution of the arbitral ruling on January 24. The Supreme Court stated that any further delay would be against the interests of both parties.
DMRC had previously informed the court that authorities were figuring out a solution because the corporation was in financial trouble and taking on a sudden liability would have a negative impact on the public interest.
In its May 2017 award, an arbitral tribunal ruled in favour of DAMEPL, which had withdrawn from operating the Airport Express metro line due to safety concerns, and accepted its argument that the viaduct through which the train would travel had structural flaws that made running operations on the line unfeasible.
The concession agreement between the two parties, which was signed on August 25, 2008, was the subject of the arbitration award.
According to the agreement, DMRC was to complete the civil works, excluding those at the depot, and DAMEPL, a joint venture between Reliance Infrastructure (R-infra) and a Spanish construction firm named Construcciones Y Auxiliar De Ferrocarriles, with a shareholding of 95 and 5%, respectively, was to complete the remaining work, including the project system works.
For the purpose of operating the line, DAMEPL had borrowed money from 11 banks: Axis Bank, UCO Bank, Punjab and Sind Bank, Andhra Bank, Central Bank of India, Dena Bank, Allahabad Bank, Canara Bank, Bank of India, IIFC UK, and Canara Bank London.
The DAMEPL promoters’ fund, banks, and other financial institutions invested more than Rs 2,885 crore towards the Airport Express line, which was finally put into service on February 23, 2011.