HC gives time to DMRC to make the unpaid payment of the arbitral sentence in DamePl

The Delhi High Court on Monday granted Delhi Metro Rail Corporation (DMRC) until August 5 to make overdue payment in relation to an arbitration award rendered in favor of Delhi Airport Metro Express Private Limited (DAMEPL).

Judge V Kameswar Rao asked DMRC to file an affidavit, showing the breakdown of payments made to satisfy the award in the following week, and scheduled the case for a rehearing on August 16.

The high court was hearing a claim from DAMEPL who said that DMRC paid him only Rs 166.44 crore on March 14 and asked DMRC to pay Rs 4427.41 crore by seizure of his bank accounts and fixed deposit. DAMEPL stated that interest continues to apply until the date of actual payment by DMRC.

DMRC told the court that the central government did not grant punishment for embezzlement in terms of their communications of April 13 and April 27, 2022, and in terms of the freedom granted to take loans, it requested quotes / proposals for raising a Capex loan from various banks for the payment of the amount due and payable to DAMEPL.

DMRC said it expects to process offers from banks by July 10 and sign loan documents by August 15.

Noting the arguments presented by counsel for DAMEPL and DMRC, the court stated that it was of the view that since the challenge to the March 10 order was decided on May 5 and the action was initiated by the DMRC, time should be granted to the DMRC to ensure payment of the outstanding amount due to the applicant/holder of the decree (DAMEPL) no later than August 5, 2022.

On March 10, the High Court had ordered DMRC to pay more than Rs 4,600 crore of the arbitration award plus interest to DAMEPL in two equal installments within two months. The first and second installments were due by April 30, 2022 and May 31, 2022, respectively.

The March 10 judgment was on DAMEPL’s motion for execution filed against DMRC regarding an arbitration award of over Rs 4,600 crore rendered in its favor on May 11, 2017.

DAMEPL’s lawyer urged the court not to grant any further extension to DMRC and order it to immediately make full payment of the balance amounting to Rs 4451.63 crore as of May 31, 2022 plus additional interest until on the date of actual payment.

He said bank accounts and amounts credited to DMRC accounts as well as term deposits, other financial investments and day to day income will be applied towards the satisfaction of the decretal amount.

The High Court previously noted that during the pendency of these proceedings, the judgment debtor (DMRC) made a payment of Rs 1678.42 crores.

An arbitral tribunal in its sentence of May 2017 had ruled in favor of DamePL, who had withdrawn from the exploitation of the Airport Express metro line for security reasons, and had accepted its assertion according to which the operation of operations on the line was not viable due to structural flaws in the viaduct through which the train would run.

The arbitration award concerned a concession agreement between the two entities, signed on August 25, 2008.

Under the terms of the agreement, DMRC was to carry out the civil works, excluding the depot, and the balance, including the project system works, was to be carried out by DAMEPL, a joint venture of Rinfra and a company of Spanish construction — Construcciones Y Auxiliar De Ferrocarriles — with a 95 and 5% stake respectively.

DAMEPL had borrowed from 11 banks — Axis Bank, UCO Bank, Punjab and Sind Bank, Andhra Bank, Central Bank of India, Dena Bank, Allahabad Bank, Canara Bank, Bank of India, IIFC UK and Canara Bank London — to carry out operations on the line.

The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore, financed by the DAMEPL promoters fund, banks and financial institutions.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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Elaine R. Knight