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In a significant development, the Bombay High Court instructed the Mumbai Metropolitan Region Development Authority (MMRDA) to deposit an arbitration award of INR 1,169 crore with the court registry amid an ongoing legal battle with Mumbai Metro One Pvt Ltd (MMOPL), a subsidiary of Reliance Infrastructure. This order followed MMRDA's appeal challenging earlier arbitral rulings over cost disputes linked to Mumbai's first metro line. The court made it clear that any stay on the award would only be considered after the deposit, reinforcing the seriousness of arbitration enforcement in India.
The Bombay High Court recently directed the Mumbai Metropolitan Region Development Authority (MMRDA) to deposit an arbitration award amounting to INR 1,169 crore with the court registry, in connection with its ongoing dispute with Mumbai Metro One Pvt Ltd (MMOPL), a subsidiary of Anil Ambani-led Reliance Infrastructure. Advertisement
This direction came as MMRDA approached the court, challenging two arbitration tribunal orders issued in August last year and earlier this year. These orders stem from multiple disputes between MMRDA and MMOPL, including disagreements over the escalated cost of Mumbai?s first metro corridor project.
In its plea, the state agency sought an interim stay on the arbitral award until its challenge could be thoroughly heard and adjudicated. However, Justice Somasekhar Sundaresan declined to offer any such relief unless the awarded sum was deposited upfront.
The judge observed that when parties voluntarily enter into arbitration and an award is pronounced, the monetary award cannot be treated as if it holds no value. He remarked that issuing a stay without requiring any deposit would go against the legislative intent set by Parliament to give arbitral awards substantive value and enforceability.
The court stated that MMRDA had not demonstrated sufficient grounds to justify an unconditional stay. It clarified that only upon depositing the full amount by mid-July would the execution of the arbitral award be temporarily stayed, pending a final decision on MMRDA?s petition.
MMOPL, a joint venture between Reliance Infrastructure and MMRDA, is the operator of Mumbai's first metro line, connecting Versova, Andheri, and Ghatkopar. Reliance Infrastructure holds a dominant 74% stake in the venture, while MMRDA owns the remaining 26%.
The disagreements between the parties date back to a 2007 agreement governing the metro?s development, which included design, engineering, financing, construction, and operations. The project had suffered delays exceeding two years, during which MMOPL claimed that the overall cost escalated from INR 2,356 crore to INR 4,321 crore?a claim that MMRDA has consistently disputed.
The High Court?s insistence on a deposit before considering a stay strengthens the enforceability of arbitration outcomes, aiming to prevent frivolous legal delays. As the matter proceeds, the resolution will likely influence how future urban transport ventures are structured and governed across the country.
Source - PTI
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