SC rejects review plea of order upholding arbitral award to Anil Ambani Group firm

The Supreme Court has dismissed a plea filed by Delhi Metro Rail Corporation (DMRC) seeking review of its judgement which upheld the 2017 arbitration award of around Rs 4,600 crore in favour of Reliance Infrastructure subsidiary, Delhi Airport Metro Express Pvt Ltd (DAMEPL), enforceable against it.

A bench of Justices L Nageswara Rao and S Ravindra Bhat said no case for review is made out.

“We have gone through the Review petitions and the connected papers filed therewith. In our opinion, no case for review of order is made out. The review petitions are dismissed. Pending application(s), if any, shall stand disposed of,” the bench in its November 23 order said.

The apex court on September 9 had upheld the 2017 arbitration award enforceable against DMRC and said there was a disturbing tendency of courts setting aside arbitral awards.

The top court had quashed the Delhi High Court order that had set aside the arbitration award in favour of DAMEPL which had pulled out from running the Airport Express metro line over safety issues.

As per the Reliance Infrastructure’s latest annual report, the award is worth around 632 million USD (over Rs 4,600 crore) including the interest.

The apex court had refused to agree with the High Court’s view that the issue of the CMRS (Commissioner of Metro Railway Safety) certificate being dealt with separately has a bearing on the Tribunal’s determination of the validity of the termination notice.

“The members of the Arbitral Tribunal, nominated in accordance with the agreed procedure between the parties, are engineers and their award is not meant to be scrutinised in the same manner as one prepared by legally trained minds. In any event, it cannot be said that the view of the Tribunal is perverse.

“Therefore, we do not concur with the High Court’s opinion that the award of the Tribunal on the legality of the termination notice is vitiated due to the vice of perversity,” it had said.

The apex court had said the conclusion of the division bench of the high court that the award of the Arbitral Tribunal suffers from patent illegality and shocks the conscience of the court is held to be “erroneous”.

The arbitral tribunal in its May 2017 award had accepted DAMEPL’s claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run.
The decision by a division bench had come on DMRC appeal against a single judge order of March 6 last year upholding the arbitral award in DAMEPL’s favour.

The concession agreement between the two was signed on August 25, 2008. Under the agreement, DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, were to be executed by DAMEPL, a joint venture of Rinfra and a Spanish construction company — Construcciones Y Auxiliar De Ferrocarriles — with a shareholding of 95 and five per cent respectively.

The Airport Express line was commissioned on February 23, 2011 after an investment of over Rs 2,885 crore, funded by the DAMEPL promoters’ fund, banks and financial institutions.

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