Reliance Infrastructure’s subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL), has been compelled to reimburse Delhi Metro Rail Corporation (DMRC) for a staggering ₹8000 Crore in a groundbreaking ruling by the Supreme Court of India. This decision marks a significant overturning of the court’s previous ruling in a longstanding legal battle between the two entities over a contractual dispute.
The apex court determined that the previous division bench’s intervention was unjustifiable, leading to what it deemed a grave miscarriage of justice.
Origin of the Dispute
The dispute arose from a 2008 Build-Operate-Transfer (BOT) agreement between DMRC and Reliance Infrastructure for the construction and operation of the Delhi Airport Express Line. However, Reliance Infrastructure terminated the contract in 2012, citing operational issues. DMRC continued operating the line but contested the termination, leading to arbitration.
In 2017, the arbitral tribunal ruled in favour of DAMEPL, awarding them ₹2800 crore plus interest in damages. This decision was upheld by a single-judge bench of the Delhi High Court in 2018 and subsequently by the Supreme Court in 2021. DMRC challenged these rulings through a review petition in November 2021, which was dismissed.
Latest Development
In a surprising turn of events, DMRC filed a curative petition, the last available remedy for the court to revise a judgement, in August 2022. On 10 April, 2024, a Supreme Court bench comprising Chief Justice D.Y. Chandrachud and Justices BR Gavai and Surya Kant ruled in favour of DMRC, setting aside all previous judgments. The Court stated that the division bench order upholding the arbitral award was a “serious injustice” and ordered DAMEPL to return the money paid by DMRC.
Reliance Market’s Reaction
Following the court’s decision, shares of Reliance Infrastructure plummeted by a striking 20%, triggering the activation of the lower circuit, a mechanism that halts trading when a stock falls by a specific percentage.
Reliance Infrastructure clarified in a stock exchange filing that the Supreme Court order did not impose any liability on the company itself. They claim to not have received any funds from DMRC/DAMEPL under the arbitration award. However, the company’s stock price remains significantly impacted by the court’s decision.
As Reliance Infrastructure navigates the fallout from the court’s decision, investors and stakeholders remain vigilant, closely monitoring developments that could shape the company’s future trajectory.
