3 days ago
MMRDA seeks stay, HC: Deposit Metro 1 1,169cr arbitral award
Mumbai: Bombay HC on Tuesday directed MMRDA to deposit by July 15 Rs 1,169 crore awarded by a three-member arbitral tribunal in 2023 to Mumbai Metro One Pvt Ltd (MMOPL), a special purpose vehicle operating the Versova-Andheri-Ghatkopar Metro line 1 in which Anil Ambani-led Reliance Infrastructure holds majority stake.
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It said the dispute would be fully examined at the final hearing but MMOPL's win in arbitration could not be rendered meaningless in the interim. Justice Somasekhar Sundaresan held that MMRDA failed to make a prima facie case for a stay without deposit.
The tribunal had in Aug 2023 awarded Rs 992 crore to MMOPL as compensation for cost escalation and other contractual disputes. With interest accrued till May 31 this year, the sum rose to Rs 1,169 crore.
MMRDA had sought an unconditional stay on the award, challenging it under Section 34 of Arbitration and Conciliation Act. It argued that the award was illegal and based on flawed assumptions about rent recovery, project delays and cost escalation. In response, MMOPL said MMRDA had approved key decisions and was now trying to backtrack from them.
HC said the award, passed by a 2:1 majority, is in the nature of a money decree and that MMRDA, being a 26% equity holder in MMOPL, was actively involved in the project's financial decision-making. "The award cannot be termed perverse or arbitrary on the face of it," it said. The court made it clear that the amended arbitration law does not permit automatic stays and rejected MMRDA's request to avoid paying the deposit.
The matter will be heard next on June 17.
An official said MMRDA is yet to get a copy of the HC order. "MMRDA will thoroughly examine the order and take appropriate action."
