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Reliance Infra stated that it is conducting a detailed review of the judgement. Photo: Company website
The Division Bench of the Calcutta High Court upheld an arbitration award in favour of Reliance Infrastructure Limited while delivering its judgement on a petition filed by Damodar Valley Corporation (DVC), challenging the award concerning the Raghunathpur Thermal Power Project, on September 27, Reliance Infra said in a statement to exchanges.
DVC filed the petition in September 2023. The arbitration award is worth approximately Rs 780 crore, including accrued interest, and bank guarantees of Rs 600 crore will also be released, according to the company’s stock exchange filing. The court upheld the award with “an exception of relief on pre-award interest and reduction in the rate of interest on bank guarantees (BG), totalling Rs 181 crore,” the company statement noted.
Reliance Infra stated that it is conducting a detailed review of the judgement and will proceed based on legal advice, either to enforce the award to the extent upheld or to challenge the judgement dated September 27, where it interferes with the award.
As per the company’s annual report for the financial year (FY) 2024, the company initiated and won an arbitration against DVC in December 2019. DVC was directed to pay Rs 898 crore and release bank guarantees worth Rs 354 crore, with the Calcutta High Court overseeing the process. “The company withdrew the cash amount deposited by furnishing a bank guarantee, which was appropriated by its lenders in lieu of providing such bank guarantees.”
In September 2023, the High Court upheld the award except on “four issues,” and the matter was pending before the bench, with both parties filing appeals.
The Raghunathpur Thermal Power Project, based in West Bengal, was awarded to Reliance Infrastructure Limited by DVC in December 2007 through an international competitive bidding process. The project, with a capacity of 2×600 megawatts (MW), was being set up by DVC under the Mega Power Policy of the Government of India.
First Published: Sep 29 2024 | 2:42 PM IST
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