Govt must be serious in honouring arbitration award: Supreme Court

Attorney General R Venkataramani said so far DMRC had paid Rs 2700 crore towards the award

The Supreme Court on Monday told Attorney General R Venkataramani that India cannot aspire to be international arbitration hub if the government failed in honouring such award, while seeking to know the timeline for payment of balance Rs 4,520 crore that Delhi Metro Rail Corp owed to Reliance Infrastructure firm Delhi Airport Metro Express Pvt Ltd (DAEML).

DAEML, which had operated the airport express line in Delhi, had sought to recover the amount towards enforcement of an arbitration award it had won in May 2017 against Delhi’s metro operator.

A bench of Justices BR Gavai and Vikram Nath told Venkataramani, appearing for Delhi Metro that "on one hand your government says that it wants to promote India as an international arbitration hub, the same government then does not abide by the arbitration award…. We will have to take this seriously.”

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Venkataramani said so far DMRC had paid Rs 2700 crore towards the award and both the central and the Delhi government, being equity partners, need to sit together to settle the issue.

“The Delhi cabinet, which was busy with the elections, can now meet. Going by the IBC way of attaching properties, one will not get anything,” he argued.

Senior counsel Harish Salve, appearing for DAMEPL, said that the governments had sufficient time to meet and decide the payment issue since the SC upheld the arbitration award in September last year.

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“It cannot remain just a paper award. How they pay is their problem? Let the managing director of the company undertake to pay in two months,” he said.

Following its contract with Delhi Metro, the Reliance Infra unit was to run the airport line till 2038. However, it stopped the operations in view of safety issues out of "structural defects in the viaduct made by DMRC". It withdrew from the contract and invoked the arbitration clause. An arbitration tribunal in May 2017 accepted DAMEPL’s claim.

The Supreme Court had on September 9, 2021 upheld the arbitration award in favour of the Anil Ambani group firm. In May, this year, the court had dismissed DAMEPL’s plea for additional interest (interest on interest) payment of around Rs 1,200 crore.