5 days ago
Deposit over Rs 1,000 cr to obtain stay on arbitral award: HC to MMRDA on dispute with Reliance Infrastructure
The Bombay High Court on Tuesday directed the MMRDA to deposit by July 15 nearly Rs 1, 169 crore in its registry to obtain stay on the operation of the arbitral award in favour of Mumbai Metro One Pvt Ltd (MMOPL) in connection with the dispute over Metro-1 (Versova-Ghatkopar) route in suburban Mumbai.
The HC refused a request by Mumbai Metropolitan Region Development Authority (MMRDA) for an unconditional stay on the arbitral award without depositing the award amount.
The MMOPL is a joint venture between Reliance Infrastructure Limited led by businessman Anil Ambani, which holds 74 per cent stake, and the MMRDA (26 % stake) and operates Versova-Ghatkopar metro corridor
The Reliance Infrastructure Limited, in its disclosure before the stock exchanges on Tuesday claimed that the entire arbitral award amount was to the tune of Rs 1,169 crore (inclusive of accrued interest as on May 31).
The arbitral tribunal in August 2023 had passed an award in favour of MMOPL to the tune of Rs 992 crore along with interest.
A single-judge bench of Justice Somasekhar Sundaresan on Tuesday passed a judgment on MMRDA's interim application seeking stay on the effect and operation of the arbitral award.
The stay application was filed by MMRDA in a Commercial Arbitration petition filed under section 34 of Arbitration and Conciliation Act, 1996, seeking to quash and set aside the said arbitral award related to development, design, engineering, financing, procurement, construction, operation and maintenance of Versova-Ghatkopar metro corridor under concession agreement of March 7, 2007.
The respondent MMOPL raised claims in arbitration proceedings stating that the delay of two years in starting the project increased its costs from Rs. 2,356 crore to Rs. 4,321 crore, which resulted in the arbitral award in favour of MMOPL.
Senior advocate J P Sen for the MMRDA argued that the impugned award was 'perverse and patently illegal' and that it should not be directed to deposit the awarded amounts as same would cause grave and irreparable harm to the authority.
However, senior advocate Prateek Seskaria for MMOPL opposed the MMRDA's application and argued that the arbitral award was entirely correct and was passed taking note of true and fair view of the factual position certified by the Board of Directors and Audit Committee of MMOPL, which included MMRDA's nominees.
After perusing submissions, Justice Sundaresan observed that 'no case was made out for an unconditional stay of the impugned award'.
'Therefore, it is directed that if MMRDA were to fully deposit the entire amount awarded in the impugned award along with interest as awarded (computed as of May 31, 2025), no later than July 15, 2025, execution of the impugned award shall remain stayed pending hearing and final disposal of the Section 34 Petition,' the HC held and disposed of the application.
