Reliance unit to refund Rs 8,000 crore to DMRC on Supreme Court order.
The Supreme Court overturned a previous decision in a major ruling. They sided with the Delhi Metro Rail Corporation (DMRC) and ordered Reliance Infrastructure to return the 8,000 crore rupees paid to their subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL). The DMRC had appealed the initial arbitration award requiring this payment.
In a strong rebuke, the Supreme Court demanded the return of all funds paid by the Delhi Metro Rail Corporation (DMRC). They acknowledged a critical error in their earlier decision, which they stated caused a serious injustice.
Reliance Infrastructure’s stock price plunged 20%. The Delhi Metro Rail Corporation (DMRC) appealed a Supreme Court decision that upheld an arbitration award for Delhi Airport Metro Express Private Limited (DAMEPL). DMRC had previously won its case in the Delhi High Court, but the Supreme Court reversed that decision.
- In 2008, Reliance Infrastructure struck a deal with DMRC to build, run, and eventually hand over the Delhi Airport Express via a BOT agreement. But Reliance Infrastructure pulled out of the agreement four years later in 2012. DMRC then took them to arbitration, and in 2017, the arbitrators ruled in favor of Reliance Infrastructure, ordering DMRC to pay them Rs 2,800 crore plus interest. Disputes arose in 2012, leading Reliance Infrastructure to terminate the agreement.
- DMRC invoked arbitration to settle the dispute.
Also read : Supreme Court: Politicians only disclose finances if it impacts voters.
Supreme Court’s Latest Decision (August 2022):
- In a significant reversal, the Supreme Court allowed DMRC’s curative petition.
- The court acknowledged an error in its previous judgment and ruled that DMRC did not have to pay Reliance Infrastructure any money.
- The court further ordered Reliance Infrastructure’s subsidiary DAMEPL to refund the Rs 8,000 crore already paid by DMRC.
Impact:
- This judgment marks a major win for DMRC and a significant financial setback for Reliance Infrastructure.
- The decision highlights the complexities of arbitration cases and the possibility of even high court rulings being overturned.
