The Supreme Court’s recent decision to set aside an Rs 8,000 crore arbitral award favoring Reliance Infrastructure’s metro arm DAMEPL in the Delhi Airport Metro dispute highlights the complex legal battle between DAMEPL and DMRC. The intricacies of the case, ranging from contract terminations to arbitration rulings, shed light on the challenges faced by both parties in resolving their disputes.
In a significant ruling, the Supreme Court has set aside an Rs 8,000 crore arbitral award in favor of Anil Ambani-owned Reliance Infrastructure’s metro arm DAMEPL. The High Court’s division bench decision was upheld due to patent illegality in the arbitral award against Delhi Metro Rail Corporation (DMRC).
This means that the amounts deposited by DMRC will be refunded, and any coercive action payments will also be refunded. While the Supreme Court allowed DMRC’s curative petition, it emphasized the need not to open floodgates for similar cases in the future.
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The case dates back to an agreement signed in 2008 between DMRC and DAMEPL for the Airport Metro Express Line. Disputes between the two parties arose, ultimately leading to the termination of the contract.
Initially, the arbitral tribunal awarded Rs 2,782.33 crore to DAMEPL in 2017, which DMRC appealed against. The case then moved to the Supreme Court, which upheld the arbitral award in 2021.
Subsequently, DMRC filed a curative petition in April 2024, leading to the Supreme Court setting aside the arbitral award. The original award of Rs 7,045.41 crore was increased to Rs 8,000 crore by 2024. DMRC, unable to pay, sought assistance from the Delhi government and the Housing Ministry.
The case revolves around a 2008 concession agreement between DAMEPL and DMRC for the Delhi Airport Express on a Build-Operate-Transfer (BOT) basis. DAMEPL terminated the agreement in 2012, citing structural defects that were not rectified by DMRC.
The main issue during the arbitration proceedings was the validity of the termination notice. The Arbitral Tribunal ultimately awarded damages to DAMEPL and directed DMRC to pay Rs 2,800 crore plus interest in 2017.
The Delhi High Court upheld the award in 2018, but it was overturned by a Division Bench. The decision was later restored by the Supreme Court in appeal. Now, with the recent Supreme Court ruling setting aside the arbitral award in favor of Anil Ambani’s firm, the case has taken a new turn.
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