The Calcutta High Court has upheld the “majority’’ of an arbitration award of Rs 1,354 crore in favour of Anil Ambani group company Reliance Infrastructure Ltd in its dispute with Damodar Valley Corporation (DVC).
“The Hon’ble High Court, except for certain issues, has upheld the majority of the award to the extent of Rs 1,354 crore including interest till date and includes bank guarantees of Rs 354 crore which were returned by DVC to the company at the direction of Arbitral Tribunal,” the company said.
Reliance Infrastructure had disclosed in December 2019 that it had won an arbitration award of Rs 1,250 crore against DVC.
The tribunal directed DVC to pay Rs 896 crore and return bank guarantees of Rs 354 crore within four weeks or pay additional interest at 15 per cent per annum for any delay in payment.
The dispute between the two parties goes back to 10 years when the Anil
Ambani group-firm had won a Rs 3,750-crore contract to set up a thermal power project at Raghunathpur in West Bengal.
However, the project reportedly went into several disputes and delays due to which DVC claimed damages from Reliance Infrastructure. While this was challenged by the latter, the arbitration tribunal ruled in its favour.
Subsequently, DVC had filed a petition in the Calcutta High Court under Section 36(2) of the Arbitration and Conciliation Act, 1996 seeking a stay of the December 2019 arbitration award.
The Calcutta High Court had directed DVC to pay the award in favour of Reliance Infrastructure.
The dispute had also reached the Supreme Court which had in April 2022 dismissed DVC’s plea that had challenged the Calcutta High Court’s direction.
DVC had earlier released the bank guarantee and paid Rs 595 crore to Reliance Infrastructure.
“The company is in process of undertaking a detailed review of the judgment and shall take further steps as per legal advice to enforce the award to the extent upheld and/or initiate proceedings to challenge the judgment dated September 29, 2023 to the extent it interferes with the award,’’ Reliance Infrastructure said.