The Supreme Court is likely to hear the appeals on April 10.
Delhi Airport Metro Express Private Ltd (DAMEPL), the Reliance Infra unit, operated the capital’s airport metro service until 2013 before cancelling the contract with DMRC citing safety issues and invoked arbitration.
Terming the HC’s directions as “erroneous” and “unprecedented in law”, the central government in its appeal before the top court said that it was not a party to the proceedings of the award and merely because it was a shareholder of Delhi Metro cannot be a reason for lifting the corporate veil to pay the arbitration money.
The government argued it was “neither a signatory to the concession agreement of August 25, 2008, nor party to the arbitral proceedings or the enforcement petition…the petitioner is only a shareholder of DMRC, holding 50% of DMRC’s equity shareholding and this status as a shareholder by itself cannot be a reason for lifting the corporate veil or for issuing the directions against the petitioner to be treated as judgement debtor for all practical purposes and to step into the shoes of DMRC.”
Separately, the Delhi High Court, while hearing the DMRC’s review petition on Wednesday, allowed the metro operator to use funds from its account only for salaries and operational and maintenance expenses.
Having noticed the directions laid down by this court on Mar 10, 2022, this court finds that in terms of that order, Delhi Metro has been accorded protection in so far as salaries and operation and maintenance expenses are concerned, Justice Yashwant Varma said on Wednesday while disposing of the review petition.DMRC had sought a review of the High Court order which directed the attachment of the entire amount in the credit of the metro operator if it failed to pay the dues of a 2017 arbitration award in favour of a Reliance Infrastructure subsidiary.
The review plea, among other directions, sought deletion of the term “total DMRC funds” from the March 17 order.
It stated that the attachment of “total DMRC funds” would result in a complete stoppage and immediate shutdown of the entire metro network operations, causing huge inconvenience to more than 5 million commuters a day.
An arbitration tribunal in May 2017 accepted DAMEPL’s claim and awarded ₹2,782.33 crore along with interest to the company. The interest portion has since increased and DMRC has so far paid only a part of the total amount.
