Reliance Infra Secures ₹780 Crore Arbitration Victory Against Damodar Valley Corp.

The Calcutta High Court has upheld a ₹780 crore arbitration award in favor of Reliance Infrastructure Ltd in its long-standing dispute with Damodar Valley Corporation (DVC), the Anil Ambani-led company announced in a stock exchange filing. The case pertains to a contract awarded to Reliance Infrastructure over a decade ago to construct a 1,200 MW thermal power plant in Purulia, West Bengal, valued at ₹3,750 crore.

Delays in the project led to disputes, with DVC seeking damages from Reliance Infrastructure. However, an arbitration tribunal ruled in 2019 that DVC must pay ₹896 crore to the company. DVC subsequently challenged the ruling in the Calcutta High Court, which has now dismissed the challenge.

The court upheld the arbitration award amounting to ₹780 crore, including accrued interest, with some exceptions. The pre-award interest and the rate of interest on a ₹600 crore bank guarantee were reduced by ₹181 crore. The court also ordered the release of the bank guarantee.

Reliance Infrastructure is currently reviewing the judgment and will decide its next steps, either to enforce the award or challenge the portions where the court interfered with the arbitration tribunal’s decision.

HBL