Reliance Infrastructure wins Rs 2,950-crore arbitral award in dispute with DMRC

Reliance Infrastructure’s subsidiary Delhi Metro Express has won a Rs 2,950-crore arbitral award against the Delhi Metro Rail Corporation (DMRC), which is expected to help the company pare debt. The arbitral tribunal held the company’s decision to terminate its concession agreement for the Delhi Airport Metro project four years ago as valid, according to reports. Reports also indicate that a three-member tribunal bench, chosen from a DMRC-nominated panel, unanimously ruled in favour of Reliance Infrastructure. The award will allow Reliance Infrastructure to recover the Rs 1,050 crore it has invested in the airport metro line and repay lenders’ debt worth Rs 1,900 crore. Reportedly, eight public sector banks will benefit from the decision as their outstanding debt from the metro project would be paid. Reliance Infrastructure had pulled out of its PPP with DMRC for the 22.7-km airport metro line in 2012, calling the Rs 5,700-crore project commercially unviable. The two parties had agreed to run it for 30 years. DMRC took over the metro line – that connects the New Delhi Railway Station to the T3 terminal of the Indira Gandhi International Airport – in 2013. As per reports, the company continued to repay loans that it incurred from the project to several banks, including Punjab National Bank, Axis Bank and Canara Bank, even after the DMRC takeover. Reliance INfrastructure reportedly argued that the liabilities should be paid by DMRC as it was running the project since 2013 and collecting income from its ticketing and retail operations. The arbitration panel, set up in October 2012, has said that DMRC should make the payment immediately post stamp duty payments. Further, according to CCEA-approved guidelines issued by Niti Aayog in September 2016, DMRC will reportedly have to pay at least 75 per cent of the award worth Rs 2,210 crore to Reliance Infrastructure against a bank guarantee, even if DMRC proposes to challenge the award.