Companies

RInfra to use proceeds from DMRC award to settle debt

Our Bureau Mumbai | Updated on September 13, 2021

The standalone debt of the Anil Ambani-backed firm to become zero once payment comes in

Reliance Infrastructure will utilise the payment it receives from Delhi Metro Rail Corporation (DMRC) to bring down its standalone debt to zero. The Anil Ambani-backed company’s standalone debt was ₹3,808 crore as of March, 2021 and DMRC is expected to pay ₹4,800 crore to RInfra.

In a landmark judgment, a division Bench of the Supreme Court, led by Justice L Nageswara Rao, along with Justice S Ravindra Bhat, recently upheld a 2017 arbitration award in favour of Reliance Infrastructure, while dismissing an appeal of the DMRC. The apex court order concludes the eight year-long legal battle between Reliance Infrastructure and DMRC around the Delhi Airport Express Metro line.

Arbitration award case

The order further reinforces the stated position of the apex court that the principle of “minimum interference” ought to be followed while dealing with the cases related to the arbitration awards. The judgment will give further fillip to the arbitration as an effective ‘alternative conflict resolution mechanism’ for all types of commercial disputes between the companies.

The Supreme Court, in its order, has clearly said that the award passed by an arbitral tribunal, whose members are engineers, is not meant to be scrutinised in the same manner as one prepared by legally trained minds.

It further said that the arbitral tribunal’s interpretation of the provisions of the concession agreement cannot be a reason to set aside the arbitral award, even if the tribunal’s interpretation is not the most correct interpretation in the opinion of the court.

Published on September 13, 2021

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