Reliance wins Rs 7.8 billion arbitration case against Damodar Corp
The Calcutta High Court has upheld a Rs 7.8 billion arbitration award in favour of Reliance Infrastructure Ltd (Reliance Infra) in its long-standing dispute with Damodar Valley Corporation (DVC). The case pertains to a decade-old contract in which Reliance Infra was tasked with constructing a 1,200 MW thermal power plant in Purulia, West Bengal, valued at Rs 37.5 billion.
Delays in the project led to disagreements between the two parties, with DVC seeking damages from Reliance Infra. However, in 2019, an arbitration tribunal ruled in favour of Reliance Infra, directing DVC to pay Rs 8.96 billion, including interest. DVC challenged this ruling in the Calcutta High Court, which dismissed the petition on September 27, 2024.
In a regulatory filing, Reliance Infra stated that the court upheld the arbitration award with certain exceptions. The judgment reduced pre-award interest and the interest rate on a bank guarantee by Rs 1.81 billion, bringing the total upheld amount to approximately Rs 7.8 billion, including accrued interest. Additionally, the court directed the release of a Rs 6 billion bank guarantee tied to the project.
The company is now conducting a detailed review of the judgment. "We will proceed based on legal advice, either by enforcing the upheld portion of the award or by challenging the aspects of the judgment that interfere with the original award," Reliance Infra said in the filing.
(ET)
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