Sun. Dec 22nd, 2024

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The Supreme Court on Wednesday allowed the curative petition filed by Delhi Metro Rail Corporation (DMRC) challenging an arbitral award directing it to pay Reliance Infrastructure subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL) to the tune of about 8,000 crore (with interest).

The DAMEPL cited the failure of DMRC to cure defects in the structure supporting the Airport Metro Express line. (Representative photo)
The DAMEPL cited the failure of DMRC to cure defects in the structure supporting the Airport Metro Express line. (Representative photo)

A three-judge bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud said that “grave miscarriage of justice” was caused by the judgment of the top court in September 2021 which upheld the award and directed DMRC to pay the amount to DAMEPL following cancellation of the contract to operate the 22.7km Airport Metro Express line.

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Following the cancellation of contract in October 2012, an arbitral tribunal award passed on 11 May 2017 was invoked by DMRC against the consortium of Reliance Energy Ltd (renamed as Reliance Infrastructure) and Construcciones y Auxiliar de Ferrocarriles SA.

Also Read:SC reserves order on DMRC plea against DAMEPL

The DAMEPL cited the failure of DMRC to cure defects in the structure supporting the Airport Metro Express line.

The bench, also comprising justices Sanjiv Khanna and BR Gavai said, “There was no need to interfere with the division bench order of the Delhi high court (in favour of DMRC). This has caused grave miscarriage of justice and an undeserved windfall to DAMEPL.”

Deciding the curative petition, the last legal remedy available to DMRC after its review petition was earlier dismissed by the top court, the bench further directed that any amount already paid by DMRC would be refunded.

DMRC had earlier claimed that it deposited an amount of 1,678.42 crore out of its total liability.

Following the September 2021 verdict by the top court, the DAMEPL had approached the Delhi high court for executing the award. The top court had in August last year asked the high court to defer the proceedings till a decision on the curative plea.

DAMEPL, a subsidiary of Anil Ambani-owned RInfra Limited, had raised safety issues in continuing with the contract to operate the 22.7km Airport Metro Express line, following which DMRC cancelled the contract in October 2012.

Arguing for DMRC, attorney general R Venkataramani and senior advocate KK Venugopal pointed out that after the termination of contract, the airport line is being successfully run by the DMRC since July 2013. It was further argued that the defects, if any, were to be seen by the commissioner of rail safety and the DAMEPL was trying to shift the blame on DMRC as it found it difficult to generate profits from the running of the train.

Under the contract signed between the two parties, DAMEPL had to pay 51 crore per annum that will be increased by 5% every year.

The DMRC further insisted that the DAMEPL had to first issue a letter intimating termination of contract giving sufficient time for DMRC to cure the defects.

The DAMEPL was represented by senior advocates Harish Salve and Kapil Sibal who pointed out that all these points did not form part of the curative petition where the Court has limited jurisdiction.

Salve said that new points were being argued in the curative petition that sought to question the award itself. He pointed out that the principal amount to be paid under the Award was 2,945.55 crore and with interest, the amount roughly crossed 7,900 crore.

The arbitral tribunal undertook a detailed enquiry and found as many as 1,551 cracks in 367 girders and 80 girders with twists varying between 10 to 20 mm.

The tribunal was of the opinion that these defects adversely impacted the integrity of the structure.

As effective steps were not taken within the 90-day cure period, the tribunal held that DMRC breached the concession agreement.

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