Calcutta High Court in favor of Reliance Infra, gets arbitration award of Rs 780 crore against Damodar Valley Corp.
In a positive development for Reliance Infrastructure, the Calcutta High Court on Friday upheld an arbitration award amounting to Rs 780 crore against the Damodar Valley Corporation (DVC), dismissing the government body’s plea challenging an earlier trial court order ordering DVC to pay. Rs 896 crore in the private sector. All eyes will be on Reliance Infra (RELINFRA) shares when the market opens for trading on Monday, as the stock has already scaled a series of milestones in the past few weeks.
The Damodar Valley Corporation (DVC), under the Ministry of Power, is responsible for generating and distributing electricity in the Damodar River Valley region.
The high court also ruled to release a bank guarantee worth Rs 600 crore filed by Reliance Infrastructure, which is part of the Reliance Group led by top businessman Anil Ambani.
“The Division Bench of the Hon’ble Supreme Court, without relief of pre-award interest and reduction of interest to BG amounting to Rs.181 crore and upheld the Award, amounting to approximately Rs. 780 crores, including accrued interest. Further, BG of Rs. -Rs.600 will also be released,” Reliance Infrastructure said in a regulatory filing on Saturday.
Reliance Infrastructure also said that “it is currently conducting a detailed review of the decision and will continue, based on legal advice, to enforce the Award up to the agreed level or to challenge the judgment of September 27, 2024, when it interferes with the Award.”.
The amount of Rs 780 crore includes interest. However, a division bench of the Calcutta High Court granted relief to Damodar Valley Corp to the tune of Rs 181 million for interest on the earlier award and reduction in the interest rate on the bank guarantee.
The issue dates back to April 2017, when Reliance Infrastructure sought arbitration following a dispute with Damodar Valley Corp over the delay in finalizing an engineering contract awarded to the state-owned corporation for the construction of a 1200 MW thermal power plant in Purulia, West Bengal.
In 2019, an arbitral tribunal ruled in favor of Reliance Infrastructure, ordering DVC to pay Rs 896 crore to the Reliance Group company.
Meanwhile, shares of Reliance Infra have risen sharply in the past, with a return of nearly 55 percent in the past month.
This marks a sharp performance for the headline index Nifty50, which has risen nearly 4 percent during this period.
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