RInfra wins Arbitration Award against DMRC
Delhi Airport Metro Express Private Limited (DAMEPL), an associate of Reliance Infrastructure Limited (RInfra), has announced that it has been awarded compensation of Rs.2,950 crore by a three member Arbitration Tribunal in a unanimous decision. The tribunal was constituted from a panel nominated by DMRC.
The Award to RInfra has been granted on the basis of termination provisions of the Concession Agreement where the arbitration tribunal has held termination by DAMEPL as valid. The compensation covers damage as a result of breach by DMRC of its obligations under the Concession Agreement and Material Adverse Effect on the ability of DAMEPL to perform its obligations under the Concession Agreement.
Welcoming the award, a RInfra spokesperson said, “Reliance Infrastructure participated in PPP model in the metro sector to lead the metro movement in the country through PPP but unfortunately had to terminate the Agreement. We welcome the award and hope it will
encourage private sector to participate in the nation building process.”
The three member Arbitration Tribunal, formed out of a DMRC nominated panel as per the Concession Agreement in September 2013 gave its award in May 2017 after hearing the case for almost four years. The Tribunal heard the submission made by both the parties and after detailed proceedings in 68 hearings; the tribunal has issued its final order whereby it has awarded the compensation to DAMEPL.
Under CCEA approved guidelines issued by Niti Ayog vide their Office Memorandum dated September 5, 2016, PSUs are expected to pay 75% of the award amount against Bank Guarantee even if they propose to challenge the arbitral award. Therefore RInfra is expected to get Rs. 2,210 crore as per above guidelines against Bank Guarantee in case DMRC proposes to challenge the award.