The Supreme Court of India has ruled in favor of the Delhi Metro Rail Corporation (DMRC) in a dispute with Reliance Infrastructure over the construction of the Delhi Airport Metro Express Line. The court has set aside an arbitral award that had ordered DMRC to pay Rs 8,000 crore to Reliance Infrastructure.
The court held that DMRC was not obligated to pay the amount as the company had not fulfilled its contractual obligations. The court also ordered Reliance Infrastructure to refund all amounts that had been paid to it by DMRC.
The ruling is a major victory for DMRC, which had been facing financial difficulties. The company had argued that it could not afford to pay the Rs 8,000 crore award.
The ruling is also a setback for Reliance Infrastructure, which had been hoping to use the award to improve its financial position. The company's shares fell sharply after the ruling was announced.
The dispute between DMRC and Reliance Infrastructure arose over the construction of the Delhi Airport Metro Express Line. The line was built by Reliance Infrastructure under a public-private partnership agreement with DMRC.
However, after the line was completed, DMRC alleged that there were defects in the construction. The company refused to pay Reliance Infrastructure the full amount that was due under the contract.
Reliance Infrastructure then initiated arbitration proceedings against DMRC. In 2017, the arbitral tribunal ruled in favor of Reliance Infrastructure and ordered DMRC to pay Rs 8,000 crore.
DMRC challenged the arbitral award in the Supreme Court. The court initially upheld the award, but later agreed to hear a curative petition filed by DMRC.
In its curative petition, DMRC argued that the arbitral award was based on a misinterpretation of the contract. The company also argued that the award was against public interest.
The Supreme Court agreed with DMRC's arguments and set aside the arbitral award. The court also ordered Reliance Infrastructure to refund all amounts that had been paid to it by DMRC.