Reliance Infrastructure has won a major Arbitration Award of Rs. 1,250 crore against Damodar Valley Corporation (DVC), a Government of India undertaking. A three-member Arbitration Tribunal unanimously gave the award in favour of Reliance Infrastructure.
Reliance Infrastructure was the Engineering & Construction contractor for Damodar Valley Corporation's 2 x 600 MW Raghunathpur thermal power project in West Bengal commissioned in 2012. The Arbitration Tribunal awarded the case in favor of Reliance Infrastructure and directed Damodar Valley Corporation to pay Rs. 896 crore and return the Bank Guarantees of Rs. 354 crore within four weeks or pay additional interest, at the rate of 15% per annum, for any delay in payment beyond four weeks.
Pursuant to the recent Niti Aayog circular, Reliance Infrastructure will request DVC to pay 75% of the Arbitral Award against Bank Guarantee immediately. The proceeds will be used to pay lenders and reduce the debt of the Company.
Regarding this award, Reliance Infrastructure spokesperson said,“This award by the Honorable Arbitration Tribunal is validation of the rightful position of the Company. It is critical for Indian EPC companies to be paid their dues on time so that they can participate in mega-infrastructure projects without the risk of getting bogged down by
working capital issues.”
Damodar Valley Corporation is an Indian government organization established in 1948 and is India’s first multipurpose river valley project, operating in West Bengal and Jharkhand.
@EPC World Media