The Supreme Court on Thursday upheld a ?2,800 crore arbitral award in favor of the Anil Ambani firm, Delhi Airport Metro Express Pvt Ltd (DAMEPL) against the Delhi Metro Rail Corporation (DMRC) in relation to the dispute over Delhi Airport Express Line (Delhi Airport Metro Express Pvt Ltd v. Delhi Metro Rail Corporation Limited).
The judgment was delivered by a Bench of Justices L Nageswara Rao and S Ravindra Bhat in a plea by DAMEPL against a January 2019 judgment of the Delhi High Court which had set aside a 2017 award of the arbitral tribunal in favor of DAMEPL.
The top court held that we set aside the findings of the High Court and uphold the award by the Tribunal in respect of the computation of Termination Payment under Clause 29.5.2.
DAMEPL is the special purpose vehicle of Reliance Infrastructure. The arbitration tribunal award is worth over 46.6 billion rupees ($632 million) including interest, according to Reliance Infrastructure’s annual report.
The case pertains to a 2008 concession agreement between DAMEPL and DMRC for Delhi Airport Express on a Build–operate–transfer (BOT) basis.
DAMEPL terminated the agreement in 2012 citing various structural defects in the metro line which were allegedly not cured by DMRC despite being pointed out by DAMEPL.
DMRC invoked an arbitration clause seeking to initiate arbitration. The main issue that arose for determination before the arbitral tribunal constituted under the concession agreement was the validity of the termination notice dated October 8, 2012.
DMRC claimed that the termination notice issued by DAMEPL is illegal, as DMRC had taken various steps for honoring its obligations under the concession agreement. In 2017, Arbitral Tribunal awarded damages to the DAMEPL and directed DMRC to pay ?2800 crore plus interest. In 2018, a single judge of the Delhi High Court upheld the award but the same was overturned by a Division Bench on appeal leading to the present plea before the apex court.
The Supreme Court in its judgment said that the arbitral tribunal in its award had clearly held that DMRC failed to cure the defects before the expiry of 90 days from the initial notice laying down the non-exhaustive list of defects. The said conclusion by the tribunal was an outcome of interpretation of Article 29.5.1 of the concession agreement entered into between DMRC and DAMEPL for design, installation, commissioning, operation, and maintenance of the Airport Metro.
The apex court held that the said interpretation is a possible interpretation of Article 29.5.1. We refuse to interfere with the findings of the Arbitral Tribunal on this point, even assuming a different view can be taken on a reading of the said Article. Further, the finding of the arbitral tribunal that the defects were not cured is one fact that cannot be interfered with by the court, the Supreme Court held