Anil Ambani's Reliance Infrastructure Ltd. has won a four-year battle for control of money from an arbitration award that it says it needs to repay lenders. The case pertains to a contract between the two companies to develop the metro express project which was terminated in 2012.
A two-judge panel of the Supreme Court on Thursday upheld the 2017 arbitration award in favor of the Anil Ambani's unit. The arbitration tribunal award is worth over 46.6 billion rupees ($632 million) including interest, according to Reliance Infrastructure's annual report, according to Bloomberg.
A bench headed by justice L. Nageswara Rao dismissed a plea by DMRC and upheld the 2017 arbitration award in favour of debt-laden Reliance Group, ADAG, led By Anil Ambani. The amount over Rs 4,600 crore, including interest, will help the beleaguered group to repay its debt. A detailed order will be uploaded on the top court website later in the day.
During the hearing in the matter, the Reliance's lawyers had contended before the top court that the firm will use the money to pay lenders.
Anil Ambani-led Reliance Group had challenged a judgment of the Delhi High Court setting aside the arbitral award won against Delhi Metro Rail Corporation (DMRC).
In 2008, Reliance Infrastructure's unit had entered into a contract with Delhi Metro Rail Corporation (DMRC) for running the city rail project till 2038.
In 2012, Ambani's firm stopped operating the capital's airport metro project, due to disputes over fee and operation. The firm initiated an arbitration case against the DMRC alleging violation of contract and sought a termination fee.
Reliance will use the money to pay lenders, the company's lawyers had said during the case hearings, following which the top court had barred banks from marking the company's accounts as non-performing assets.
The final ruling in the case also lifts the court's restriction on lenders.
The public private partnership project was operated by Delhi Airport Metro Express Pvt Ltd (DAMEPL), a special purpose vehicle promoted by Ambani’s Reliance Infra.
RInfra is one of the leading infrastructure companies, developing projects through various special purpose vehicles in several high growth sectors such as power, roads and metro rail in the infrastructure space and the defence sector.
The shares of the company were trading Rs 3.50 up or 4.95 percent at Rs 74.15 at 1:32 PM.
(With IANS inputs)