"Impasse Which Exists Needs To Be Resolved Expeditiously": Delhi HC On DMRC-DAMEPL Issue

The Delhi High Court Friday asked the Centre and AAP government to make an endeavour to speedily resolve the impasse over unpaid arbitral award by DMRC to Reliance Infrastructure-owned Delhi Metro Express Private Limited (DAMEPL), saying there is a need to protect the Delhi Metro which constitutes the lifeline for the residents of the national capital.

The high court issued notices to the Union Ministry of Housing and Urban Affairs and Delhi government to apprise it of how the unpaid arbitral award will be paid.

The Central and Delhi government are the two essential stakeholders in the Delhi Metro Rail Corporation (DMRC), which informed the high court that despite making requisite efforts, the two stakeholders have been unable to arrive at a consensus on the ways and means by which the amount payable under the award may be liquidated.

Justice Yashwant Varma impleaded the two governments as parties in the execution proceedings filed by DAMEPL seeking recovery of the unpaid portion of the arbitration award.

"The court hopes and trusts that the shareholders shall bear in mind that the impasse which exists needs to be resolved expeditiously bearing in mind the peremptory directions of the Supreme Court as well as the need to protect and preserve the DMRC which not only represents a project of immense public importance but also constitutes the lifeline for the residents of the NCT," the high court said.

The court noted the total amount of the award with interest till February 14, 2022 was Rs 8009.38 crore. Out of this, a sum of Rs 1678.42 crore has been paid so far by the DMRC and Rs 6330.96 crore is still due to be paid.

"Undisputedly, the two principal shareholders of the DMRC are the Ministry of Housing and Urban Affairs in the Union Government and the Delhi Government. The ends of justice would thus warrant the said shareholders being placed formally on notice and being invited to address submissions before this court proceeds in the matter and evolves and adopts an appropriate measure for the purposes of recovery of the monies payable under the award," the high court said, while listing the matter for further hearing on February 20.

In January, the DMRC had told the court it has requested the Centre and the city government for paying over Rs 3,500 crore each as interest free subordinate debt for repayment of the unpaid arbitral award.

It had said though this step of interest free subordinate debt lay more financial burden on the Delhi Metro, the less bothersome option of issue of equity shares which was explored earlier failed to materialise.

On Friday, the high court said if some say they are unable to pay the amount, then it has to see how to make them pay and how to recover the money.

To this, Attorney General R Venkataramani, representing the DMRC, submitted the corporation has brought on record why it is unable to pay and it is not that these excuses are fictional or that it was avoiding the payment.

"My endeavour is also to get it done this way. That is why this is the best way to happen," the law officer said on the court's remark that it will have to find ways and means on how to recover the money under the award.

The Attorney General said let the central and state government come to the court and take a stand on the issue and then the court will be able to push it further.

The judge said this entirely brings the pressure on the court to bring both the parties to a common platform and try and work out a solution.

"In a way calling the Union of India and Delhi government to the court amounts to lifting the corporate veil," the court said.

Senior advocate Kapil Sibal, appearing for DAMEPL, agreed to it and suggested that the court may direct the governments to file an affidavit as to how they propose to pay the money.

He said in light of the position as it prevails today, the court would be justified in lifting the corporate veil of the corporation and proceeding further against the stakeholders for the purposes of execution of the award which undisputedly has attained finality.

Earlier, the DMRC had informed the court that meetings were held with the Centre, Delhi government and other stakeholders to discuss the modalities for payment of the balance arbitral award to DAMEPL.

The metro rail had said if any adverse orders were passed against it at this point of time, millions of commuters will be simply told they cannot use the Delhi Metro.

On March 10 last year, the high court had directed the DMRC to pay the over Rs 4,600 crore arbitral award along with interest to DAMEPL in two equal installments within two months.

The first and second installments were to be paid on or before April 30, 2022 and May 31, 2022, respectively.

The direction had come on DAMEPL's execution petition filed against the DMRC over the arbitration award passed in its favour on May 11, 2017.

An arbitral tribunal had ruled in favour of DAMEPL, which had pulled out of running the Airport Express metro line over safety issues, and accepted its claim that running the operations on the line was not viable due to structural defects in the viaduct through which the train would pass.

Cause Title- Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation Ltd

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With PTI Inputs