Reliance Industries shares gained 4 percent intraday Tuesday after the company has won arbitration case in Delhi High Court against Delhi Metro Rail Corporation (DMRC).
“The Delhi High Court has upheld the arbitration award of Rs 2,950 crore as compensation along with interest to Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of Reliance Infrastructure (RInfra), by a three-member Arbitration Tribunal,” the Anil Dhirubhai Ambani Group Company said in its filing.
RInfra stands to get Rs 5,060 crore from the award, which it will entirely utilise to reduce its consolidated debt. This amount is arbitration award amount plus interest till March 31, 2018.
“The Delhi High Court has upheld the award by the arbitration tribunal, we expect the compensation to be paid expeditiously, which we shall utilise to retire the outstanding debt of RInfra and DAMEPL,” RInfra spokesperson said.
The HC upheld the validity of the award granted by the three-member Arbitration Tribunal unanimously on the basis of termination provisions of the Concession Agreement, which DAMEPL had utilised to terminate its agreement with Delhi Metro Rail Corporation (DMRC).
The compensation awarded by the tribunal was challenged in Delhi HC by DMRC.
The award had been granted as a result of breach by DMRC of its obligations under the Concession Agreement and Material Adverse Effect on the ability of DAMEPL to perform its obligations under the Concession Agreement. The tribunal was constituted from a panel nominated by DMRC.
The three-member Arbitration Tribunal, formed out of the DMRC-nominated panel as per the Concession Agreement in September 2013. It gave its award in May 2017 after hearing the case for almost four years.
The tribunal heard the submissions made by both the parties and after detailed proceedings in 68 hearings, it had issued its final order whereby it had awarded the compensation to DAMEPL.
At 13:49 hours IST, the stock price was quoting at Rs 450.05, up Rs 16.95, or 3.91 percent on the BSE.>