The Delhi Metro Rail Corporation (DMRC) assured the Delhi High Court on February 21 that it would deposit Rs 600 crore within two days in an escrow account for Delhi Airport Metro Express Private Limited (DAMEPL), which had commenced proceedings against DMRC regarding an arbitration award of over Rs 4,600 crore in its favour. Judge Suresh Kumar Kait noted the statement made by the DMRC lawyer and reserved the order on the enforcement motion.
Lead lawyer Parag Tripathi, representing DMRC, initially said the company would pay Rs 600 crore in 72 hours and urged the court to give him some time to approach the banks to take out the loan to pay the award amount arbitration.
He said the money he receives from government agencies is for completing the metro projects and the amount cannot be used by DMRC to pay the amount of the arbitration award.
“I have money in my account, but it is for a project and it is not my money. I have no authority to dispose of this money,” Tripathi said on behalf of DMRC. The court however demanded DMRC to deposit Rs 600 crore within two days, and the lawyer appearing for this agreed.
Meanwhile, lead lawyer Ramji Srinivasan, appearing for some banks, said they were the project’s lenders and needed their money whether it was paid by DMRC or DAMEPL.
He urged the court to ensure that the money received is not disbursed outside and given to lenders. He said the amount still owed to the lenders was more than Rs 9,000 crore, while the amount that must have come from this proceeding is around Rs 6,000 crore. DAMEPL was represented by lead counsel Rakesh Kumar Khanna.
In an earlier affidavit, DMRC said that as of February 14, it had a total of Rs 5,694.25 crore as funds, including Rs 1,452.10 crore as DMRC funds and Rs 29 crore in project funds.
The court had previously ordered DMRC to give details of its funds and balance sheet. On January 24, the Supreme Court had asked the DMRC and the DAMEPL to seize the High Court of the dispute relating to the execution of the arbitration award, considering that any additional delay is prejudicial to the interest of both parties.
Last year, DMRC told the court that since the company was facing a financial crisis, taking on sudden liability would impact the public interest and authorities were therefore seeking a solution.
DMRC had said it would deposit Rs 1,000 crore in favor of DAMEPL in an escrow account and suggested taking over debt from subsidiary Reliance Infrastructure to the extent of the award money, saying that would be a better position to negotiate with lending banks. .
The offer was, however, rejected by DAMEPL and the court observed that if the holder of the decree did not want to accept the proposal, he could not be compelled to do so. The High Court had earlier arrested DAMEPL for playing hide and seek with the court and having out-of-court communications with DMRC to settle the dispute over the enforcement of the arbitration award of over Rs 4,600 crore rendered against the PSU.
An arbitral tribunal in its May 2017 award had ruled in favor of DAMEPL, which had withdrawn from operating the Airport Express metro line for safety reasons, and had accepted its assertion that the operation of operations on the line was not viable due to structural flaws in the viaduct over which the train would pass.
The arbitration award related to a concession agreement between the two entities, which was signed on August 25, 2008. Under this agreement, DMRC was to carry out the civil works, excluding the deposit, and the balance, including including the project’s 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 95 and 5 percent stake, respectively.
DAMEPL had borrowed from 11 banks — Axis Bank, UCO Bank, Punjab and Sind Bank, Andhra Bank, Central Bank of India, Dena Bank, Allahabad Bank, Canara Bank, Bank of India, IIFC UK and Canara Bank London — to effect line operations.
The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore, financed by the DAMEPL promoters fund, banks and financial institutions.