SC halts HC's Rs 1,169 crore deposit order in MMRDA–Reliance metro dispute
Supreme Court
has halted a
Bombay High Court
order that asked
Mumbai Metropolitan Region Development Authority
(MMRDA) to deposit the entire
arbitral award
of Rs 1169 crore that
Mumbai Metro One Private Ltd
(
MMOPL
), a subsidiary of Anil Ambani's
Reliance Infrastructure
, won in 2023.
However, the apex court said that the HC direction to deposit the entire award amount favouring MMOPL will remain stayed subject to MMRDA depositing 50% of the awarded amount in the HC.
A Bench led by Justice Manoj Mishra sought response from MMOPL on an MMRDA's appeal against the HC July 10 order that refused the latter's request for unconditional stay on the arbitral award.
by Taboola
by Taboola
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The top court further clarified that the pendency of the proceedings shall not preclude the HC from proceeding further with the hearing of the application filed by MMRDA under of the Arbitration and Conciliation Act, 1996 and if, in the meantime, the HC finally decided the application, one way or the other, this interim order shall abide the order passed by the HC.
Solicitor General Tushar Mehta, appearing for the state entity, contended that stay condition of depositing the entire awarded amount, at this stage, would be unduly harsh and therefore, it was a fit case to modify the condition imposed by the High Court while granting interim relief to the Ambani firm.
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MMRDA in its appeal submitted that the HC had erred in not granting the interim relief given that the impugned award passed by the tribunal was patently illegal and perverse, beyond the scope of the
arbitration agreement
, in breach of the principles of natural justice and passed without application of mind and without any basis of evidence.
Majority decision of a three-member arbitral tribunal in 2023 had awarded Rs 992 crore with interest to MMOPL, a SPV between Reliance Infrastructure that holds 74% stake and MMRDA that holds 26% stake. The award was passed by the tribunal in 2023, and then corrected in 2024. The JV operates Mumbai's first metro line on Versova -Andheri-Ghatkopar corridor.
The Maharashtra government had in June 2006 awarded the Metro One Project to the consortium of Reliance Infrastructure and Veolia Transport SA (now known as Transdev Lle – de - France).
Multiple disputes arose between the parties over development, design, engineering, financing, procurement, construction, operation and maintenance of a mass rapid transit system, besides a delay in completion of the project. The
metro rail project
started with a delay of over two years. MMOPL claimed that the project costs increased from Rs 2,356 crore to Rs 4,321 crores, which the MMRDA has contested.
Accordingly, the Ambani firm had invoked the arbitration clause under the Concession Agreement.
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