NEW DELHI: The Delhi Metro Rail Cooperation (DMRC) on Tuesday wrote to the Centre and Delhi government to seek clarity on providing the sovereign guarantee or subordinate debt to liquidate its liability in favour of Delhi Airport Metro Express Pvt Ltd, a subsidiary of a Reliance Infrastructure, against the arbitration award.
DMRC sent separate letters to the Ministry of Housing & Urban Affairs (MoHUA) and the Government of Delhi on March 28. In the letters, DMRC has said that Delhi High Court in its order on March 17 has directed Union Government and Delhi Government to attend to the requests of DMRC, within two weeks from the date of the order, for an extension of sovereign guarantee or subordinate debt, enabling the corporation to liquidate its liability under the arbitration award.
Notably, the Delhi HC in its order on March 17 had directed the Centre and Delhi government, who are 50:50 partners in the DMRC, to either provide a sovereign guarantee to DMRC for raising debt from the banks or extend the subordinate debt so that the corporation could satisfy the arbitration award in favour of DAMEPL. The DMRC has requested both governments to issue further directions in this regard as the two weeks mentioned in the High Court order ends on March 31.
According to a source, there has been no response from both the stakeholders, including the Centre and Delhi Government on DMRC’s request. As of date, DMRC has to pay Rs 4,700 crore to DAMEPL. It has so far paid Rs 2,600 crore to the company. The Supreme Court had, in September 2021, upheld the Rs 7,000 crore arbitration award in favour of DAMEPL.
According to the Delhi HC order, if the Centre and Delhi government fail to extend sovereign guarantee or subordinate debt to DMRC by March 31, then as a next step the government of India shall return by March 31, the funds received from DMRC after the Delhi HC order dated March 10, 2022. Upon such funds being received, DMRC was to then pay the entire remaining amount to DAMEPL forthwith.
The government of India as well as the government of NCT of Delhi have filed SLPs before the Supreme Court challenging the Delhi HC order, as regards the lifting of the corporate veil of DMRC. The Supreme Court will hear the matter on April 10.