Reliance vs DMRC: SC says where is question of negotiation, compelling for a compromise

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The Supreme Court on Monday told the Delhi Metro Rail Corporation that where is the question of negotiation when Reliance Infrastructure’s subsidiary, Delhi Airport Metro Express Pvt Ltd (DAMEPL), wants its money and also how can it compel a party for compromise when an award is in its favour.

A bench comprising Justices L. Nageswara Rao and B.R. Gavai asked the DMRC and the DAMEPL to appear before Delhi High Court on January 31 and request it for hearing the dispute relating to execution of the over Rs 7,000 crore arbitral award in favour of DAMEPL at the earliest.

Senior advocate Mukul Rohatgi, representing DAMEPL, submitted that there is no defence after the top court has upheld the order. He said: “Let them deposit the money. The court can give them a few months, but the execution cannot be stalled…”

Senior advocate Parag Tripathi, representing the DMRC, submitted that his client was ready to take over the DAMEPL’s liabilities to the extent of the award money and as a result, it would be in a better position to negotiate with the lender banks. Rohatgi, opposing this argument, said: “I will deal with my creditors myself… who is he?”

Tripathi then cited a letter written, in December last year, by the DAMEPL to the DMRC asking if it was ready to take over its debt which was to be paid by DAMEPL and Reliance Infrastructure to their lenders.

The bench told the DMRC counsel that there is an award in the DAMEPL’s favour, which has been confirmed by the top court. “Now you are saying we will negotiate with your bankers,” noted the bench.

As Tripathi said that his client has deposited Rs 1,000 crore after the order and sought permission to negotiate, the bench told him: “Where is the question of negotiation, when he is saying he wants his money?”

Citing the impact of liability, Tripathi submitted the whole metro operations would come to a halt, not only in the capital, but also in five other cities. Rohatgi insisted that the DMRC should give a plan to complete the payment and his client will deal with the creditors.

As Tripathi said, “They agreed for a compromise…”, Justice Gavai said: “Can we compel them for a compromise?”

Tripathi further added that his client has money for Nagpur, Patna and other cities and these are grants from multilateral loan agencies and if they are attached, it will create a very serious problem. “I am not running away. I am not a fly by night operator,” he submitted. The top court noted that hearing on the execution application should not be delayed any further, as it is detrimental to the interest of both the parties.

The bench noted that the execution application filed by DAMEPL was adjourned to March 29, 2022, and the high court recorded that there were efforts to settle the dispute in connection with the manner of payments with the banks and financial institutions, which did not yield any results.

In its order, it said: “The parties are directed to appear before the high court on January 31 and request the high court to take up the matter at the earliest. We request the high court to dispose of the execution application without any further delay…”

The DAMEPL moved the top court with an award execution application.

In September, last year, the top court ruled that the state-owned enterprise has to pay an arbitral award of around Rs 7,200 crore to the DAMEPL.

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