The Delhi High Court on Tuesday directed the Delhi Metro Rail Corporation (DMRC) to pay ₹3,502.62 crore to Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of Reliance Infrastructure Limited, which was operating the airport express line earlier.
Justice Sanjeev Sachdeva upheld DAMEPL’s plea for payment of 75% of the arbitral award in its favour to pay off project lenders and promoters, who had financed the project.
Direct deposit
The court also dismissed the DMRC’s plea challenging the Arbitral Tribunal’s May 2017 decision asking it to make payments to DAMEPL for breach of its obligations under the Concession Agreement to cure defects in the civil structure of the Airport Metro Line within the ‘cure period’.
The HC verdict stated: “DAMEPL has sought direction for release of deposited amount to project lenders and promoters who had financed the project. The prayer is allowed... However, instead of depositing the said amount in court, the Delhi Metro is directed to deposit the amount along with interest, as awarded by the Arbitral Tribunal, directly with the project lenders. The said amount be deposited in the escrow account maintained with the project lenders, within a period of four weeks from today.”
The 23-km-long Airport Metro Express Line, which runs between New Delhi and Dwarka, started off as a Public Private Partnership between the Delhi Metro and DAMEPL.
The land was acquired by the DMRC and all basic civil structures were constructed by it. Balance systems such as track, signalling, electrification, and rolling stock were to be implemented by the private partner.
Agreement terminated
DAMEPL had said that during the course of operation of the project, it noticed various defects in the works performed by the Delhi Metro. It is contended that the defects severely impaired the performance of the obligations under the Concession Agreement.
DAMEPL said it terminated the concession agreement as the DMRC had not cured some defects in the express line within 90 days of the notice issued by it. After handling over the line to the Delhi Metro on July 1, 2013, DAMEPL asked the DMRC to give the Termination Payment as per the Concession Agreement. After efforts to amicably resolve the issues did not yield results, both parties went into arbitration.
