DMRC informs Delhi High Court: Delhi Government unwilling to contribute in payment of Arbitral Award to DAMEPL The Delhi Government through its letter written to Delhi Metro Rail Corporation (in short DMRC) said that it was unwilling to provide Rs. 3,565.64 crore towards equity, which was essential as a part of payment to Reliance Infrastructure entity. The Delhi Government in its...
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DMRC informs Delhi High Court: Delhi Government unwilling to contribute in payment of Arbitral Award to DAMEPL
The Delhi Government through its letter written to Delhi Metro Rail Corporation (in short DMRC) said that it was unwilling to provide Rs. 3,565.64 crore towards equity, which was essential as a part of payment to Reliance Infrastructure entity.
The Delhi Government in its letter specified that shareholders of DMRC cannot be held liable for payments arising out of disputes or contractual defaults". Further added that the company can raise money through externally aided funds or from the open market or seek loan from Government of India to meet its liabilities.
The Delhi Metro is a government-owned company whereas the DAMEPL is owned by Reliance Infrastructure. The shareholders of DMRC also includes the Government of National Capital Territory and the Union Ministry of Housing and Urban Affairs (in short MOHUA).
The Delhi Government's contention came as part of the High Court in a matter which was pertaining to the enforcement of an arbitration award of Rs. 7,200 crore in favor of Delhi Airport Metro Express Private Ltd (in short DAMEPL). The DMRC has already paid dues worth Rs. 2,600 crore out of Rs. 7,200 and now owes an outstanding amount of Rs. 4,500 crore to DAMEPL. This came as the High Court was directed to expediate matters by the Supreme Court within three months.
On 13 December, 2022 the DMRC held a board meeting wherein, to meet the liability arising out of the arbitral award in favor of the DAMEPL, the board of directors considered seeking approval of the board in requesting Delhi government and MOHUA, both being the key stakeholders.
The letter from the government is expected to delay the process of raising funds, as the DMRC had opened its rights to issue to raise funds from 15 December 2022 till 11 January 2023.
The DAMEPL informed the Court that, "We are not receiving any assurance from the Centre in terms of the payment and its schedule, even now the Attorney General is not giving any assurance despite an order from the Supreme Court."
The DMRC retaliated stating that the company is hopeful that the matter will come to some direction by 16 January, 2023.
The Supreme Court had directed the High Court to conclude the case expeditiously. The Top Court has also asked the Centre to provide precise timeline for settling the dues payable to Delhi Airport Metro by Delhi Metro Rail Corporation (DMRC).
On 16 January, 2023 the DMRC is expected to place the letter received from the government before its board of directors.