NEW DELHI, INDIA (Metro Rail News): On 09th September 2021, the Supreme Court of India upheld Reliance Infrastructure’s Rs. 2800 Crores arbitral award, directing Delhi Metro Rail Corporation Ltd. (DMRC) to pay vandalism Rs. 2800 Crores plus interest to Reliance Infrastructure or Reliance Infra arm.
As of January 2019, The court has directed DMRC to pay damages to the tune of Rs 2,800 crores plus interest. The amount, including interest, is believed to be Rs 4,800 crores.
The case pertains to a 2008 agreement between Reliance Infra and DMRC for Delhi Airport Express on a Build–operate–transfer (BOT) basis. However, in 2012 Reliance Infrastructure terminated the agreement.
DMRC solicit an arbitration clause seeking to initiate arbitration. In 2017, Arbitral Tribunal awarded damages to the Reliance Infra arm and directed DMRC to pay Rs. 2800 Croress plus interest.
In 2018, one Judge Bench of Delhi supreme court upheld the award and directed DMRC to pay damages.
However, in relief to DMRC, the Division Bench of Delhi High Court (HC) set aside the arbitral award in 2019.
Reliance Infra then moved Supreme Court (SC) to challenge the Delhi supreme court to line aside from the arbitral award.
History of the Airport Express Line of the Delhi Metro?
The 22.7 KM Airport Express line, also known as Orange, runs between New Delhi Railway Station and Dwarka Sector-21 via IGI Airport’s Terminal-3 build at Rs 5,800 crore; it was opened in February 2011, after failing to cover the original launch deadline before the 2010 Commonwealth Games. The trains stop at three stations, i.e. e, Shivaji Stadium, Dhaula Kuan, and Aerocity. Thus, a commuter can get to the international airport from the New Delhi railway station in the city’s heart in just 20 minutes.
What was the dispute?
The dispute was between DMRC and DAMEPL started a little more than a year after the line became functional.
On 07th July 2012, services came to a halt with DAMEPL, entrusted with running the trains, alleging severe technical defects in its construction.
By then, Reliance Infrastructure had also claimed that the line suffered huge losses due to less than projected ridership; Although at the same time, the projection was over 40,000 persons per day, the daily ridership stood at the half, which means around 20,000. Moreover, DAMEPL argued that, was coming in the way of raising revenue through other modes such as advertising, leasing out shops to retailers.
When did DAMEPL withdraw this agreement?
As per the agreement, the DAMEPL was supposed to run the line for approximately 30 years. However, on 08th October 2012, DAMEPL served a termination notice to DMRC, citing issues related to financial viability and the alleged failure on the part of the corporation to fix the defects in the construction. DMRC disputed the notice and referred the matter for arbitration award proceedings.
During the proceeding, DAMEPL resumed its services on the line in January 2013. However, it wrote to DMRC on 27th June 2013, announcing that it would not run the line from midnight of 30th June 2013. DMRC then took over the operation of the line, as per the terms of the contract. In addition, the line has remained functional, and DMRC has claimed it has managed a turnaround in terms of ridership.