Bhuvana Marni
Published on: October 11, 2022 at 11:59 IST
The Delhi Metro Rail Corporation (DMRC) informed the Delhi High Court that it has asked for financial assistance from its two equity partners, the Union of India and the Delhi Government, to fulfil its obligation under a 2017 arbitral ruling to the Reliance Infrastructure-backed Delhi Airport Metro Express Private Ltd (DAMEPL).
DMRC owes the Reliance subsidiary Rs. 7,010.08 crore as of September 6. 2,599.17 crore rupees have been given to DAMEPL.
The Delhi government and the Center have each been asked for Rs 3500 Crore by the DMRC.
When speaking on behalf of the Delhi Metro, Attorney General of India R. Venkataramani informed the bench of Justice V Kameswar Rao that since the equity partners are considering the matter, it would be appropriate if the court did not pass any adverse orders affecting the maintenance and operations of the Delhi Metro.
“Having regard to the gravity of the situation namely that anything that is done regarding the activities and operations of the Delhi Metro will have serious consequences for its current operations. Millions of commuters will simply be told you can’t use Delhi metro if any adverse order is passed against Delhi metro at this point in time,” Venkataramani submitted.
Furthermore, the AG referred to an additional affidavit filed by DMRC stating that if the company pursues raising any loan, it may fall into a financial trap.
“The importance of complying with the decree is well taken but equally important is the concerns of the Delhi Metro. We are taking stock of in what manner decree can be executed as soon as possible … Even earlier, the Metro was pursuing other alternative and writing its concerns to two equity partners. I suppose this matter will receive utmost expedition from both equity partners,” Venkataramani submitted.
He added: “Every effort will be made to ensure that the decree is honoured but that must be honoured in a way which is comfortable to the to the Delhi Metro and our operations.”
As a result, the AG requested two weeks to provide to the court with the details of the payment to be made to DAMEPL by the award.
The matter was therefore postponed until October 31.
According to an additional affidavit submitted by DMRC, the company’s activities would complete a standstill if any unfavorable judgement were rendered against it at this time, which would be detrimental to the public interest given that there are over 48 lakh trips made every day.
“DMRC has already tendered an amount of approx. Rs. 2600 Crore to the Decree Holder and is expecting funds infusion from its shareholders so as to satisfy the payment of remaining amount of the Arbitral Award,” the affidavit reads.
On September 6, the court ordered DMRC to pay the remaining debt owed to DAMEPL within four weeks, or else its managing director would have to be called in for an appearance. On Monday, the AG made her first appearance in the case.
A petition by DAMEPL asking for the execution of the arbitration decision from May 11, 2017, is being heard by the court.
A contract about “the design, installation, commissioning, operation, and maintenance of the line” was signed by DMRC and DAMEPL in 2008.
However, in 2012, the DMRC called for arbitration when DAMEPL ended the contract for several reasons owing to disagreements, and the issue was arbitrated as a result of those disagreements.
The Supreme Court maintained the DAMEPL-favoring verdict last year.
Case Title: Delhi Airport Metro Express Private Limited vs. Delhi Metro Rail Corporation Ltd.