On Tuesday, the Supreme Court, a Reliance Infrastructure firm, clarified its stance, stating that it is pursuing reimbursement for the costs of trains from the Delhi Metro Rail Corporation (DMRC) rather than seeking damages.
New Delhi: On February 20th, 2024, the Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of Reliance Infrastructure, notified the Supreme Court that it was not seeking damages from the Delhi Metro Rail Corporation (DMRC). Instead, it sought reimbursement of costs for trains acquired to operate on the airport metro line, as per the 2017 arbitral award.
A Special Bench headed by Chief Justice D.Y. Chandrachud heard arguments from both sides and reserved its verdict on the curative plea filed by DMRC against the dismissal of its review petition regarding the arbitral award favoring DAMEPL, amounting to Rs 8,000 crore.
Represented by senior advocates Harish Salve and Kapil Sibal, Reliance Infrastructure criticized DMRC’s curative plea as an attempt at “whole-sale trial by ambush.”
DMRC’s challenges to the arbitral award stem from its contention that DAMEPL’s termination notice in 2012, ending the concessionaire agreement for the airport metro line, was illegal. Attorney General R Venkataramani and senior advocate K K Venugopal, appearing for DMRC, argued the maintainability of the curative plea, asserting that upholding the award would result in a miscarriage of justice.
Venugopal assailed the agreement termination notice of DAMEPL on the ground of some structural infirmities in the airport metro line and said, “Today the trains are running at the speed of 120 km/hour.” At the outset, Salve put forth his arguments on behalf of the Reliance firm and said, “I am not suing them (DMRC) for damages. I am not seeking even a rupee as damages. I am seeking the cost of trains.” “They (DMRC) have the trains. They have to pay for the trains and this (arbitral) award is for the trains. Well, if the amount has ballooned then it is how the arbitration law applies,”
Salve said
DAMEPL wasn’t seeking damages but rather reimbursement for the cost of trains, citing structural deficiencies in the airport metro line that could have posed liability risks.
Salve addressed that
Sibal addressed “The legal principles behind curative pleas, arguing against DMRC’s petition’s maintainability”.
Previously, the Supreme Court suggested a five-judge bench to hear DMRC’s curative plea. DMRC filed the plea in August 2022, following the dismissal of its review petition in 2021.
After DMRC’s plea was dismissed, Reliance Infrastructure sought execution of the arbitral award from the Delhi High Court. The High Court, while acknowledging the urgency of paying salaries and operation expenses, also stressed the sovereign governments’ responsibility to honor binding judgments.
The High Court’s March 17 order directed the Center and the City Government to consider extending sovereign guarantees or subordinate debt to facilitate DMRC’s payment obligations arising from the arbitral award.
In May 2017, the arbitral tribunal ruled in favor of DAMEPL, acknowledging structural defects in the viaduct of the Airport Express metro line that rendered operations financially unviable. As of February 14, 2022, DMRC had paid Rs 1,678.42 crore of the Rs 8,009.38 crore award, an outstanding balance of Rs 6,330.96 crore.