Setback for Anil Ambani in ₹8,000 crore case

Setback for Anil Ambani in ₹8,000 crore case

In a relief to DMRC, The Supreme Court on Wednesday set aside the Rs 8,000 crore arbitral award which was favour of Anil Ambani-owned Reliance Infrastructure’s metro arm Delhi Airport Metro Express Private Limited (DAMEPL).

The SC upheld the High Court’s division bench decision which said that the arbitral award against Delhi Metro Rail Corporation’s (DMRC) suffered patent illegality.

“The amounts deposited by DMRC shall be refunded. Any amount paid by petitioner as part of coercive action has to be refunded,” a bench led by Chief Justice of India DY Chandrachud said.

Reserving the verdict, the SC allowed DMRC curative petition. “However, the curative jurisdiction cannot be opted to open floodgates. In the specific facts and circumstances of the case. Interference of Supreme Court had led to grave miscarriage of justice,” the bench said.

In February, the SC bench had reserved its verdict on DMRC’s curative plea against the dismissal of its review petition against the arbitral award of Rs 8,000 crore in favour of DAMEPL.

DMRC-DAMEPL saga

• DMRC and DAMEPL in 2008 signed agreement to design, install, commission, operate and maintain the Airport Metro Express Line starting from New Delhi Railway Station to Sector 21 Dwarka for 30 years. This line was to run through the Delhi Airport
• DMRC constructed all civil structures, DAMEPL took care of all system works
• DAMEPL suspended operations after certain defects were found in the viaduct and served a notice to DMRC, which was incharge of this aspect, to fix the problem. This was in July 2012
• In October 2012, DAMEPL served a termination notice
• Authorities conducted inspections in November 2012, line was cleared for operations in January 2013
• The Line was restarted in January by DAMEPL, but gave up the project within five months in June 2013. DMRC invoked the arbitration clause in the contract
• Later on, the arbitral tribunal ruled in favour of DAMEPL and asked DMRC to pay Rs 2,782.33 crore in 2017

After this, DMRC moved Delhi High Court, but a single bench there dismissed the petition. However, the division bench later on set aside the arbitral tribunal’s order, terming it ‘in conflict with the public policy of India.’

Following this, the Anil Ambani-led company’s arm moved Supreme Court. In 2021, the SC ruled that arbitral tribunal awards cannot be challenged and upheld the award.

It is after this decision that the DMRC filed a curative petition, which was allowed by the apex court on April 10, 2024.

The original arbitral award swelled to Rs 7,045.41 crore till end of 2021 when the DAMEPL asked Delhi HC to enforce the 2017 order. DMRC had paid Rs 1,000 crore by then, and informed the court that it was not in a position to pay the arbitral award. It said that the Delhi government and the Housing and Urban Affairs Ministry should pay.

Today, the amount has increased to Rs 8,000 crore.

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