Synopsis: Reliance Infra wins Rs. 4,600 crore arbitration award against Delhi Metro. The Supreme Court upheld an arbitral verdict in favour of the debt-ridden Reliance Group, led by Anil Ambani, in a major victory for the beleaguered company.
Reliance Infra wins a four-year legal battle against Delhi Metro worth Rs. 4,600 crores that it claims it needs to repay lenders.
On Thursday, a two-judge panel of the Supreme Court upheld Anil Ambani’s unit’s 2017 arbitration award. According to Reliance Infrastructure’s annual report, the arbitration tribunal award is worth about Rs. 4,600 crores ($632 million) including interest.
The decision is a significant win for Ambani, whose telecom companies have gone bankrupt and he is fighting a personal insolvency lawsuit filed by the country’s top lender. Following the court judgement, the stock rose by the daily limit of 5%.
During the case proceedings, Reliance’s lawyers stated that the money will be used to pay lenders. As a result, the top court banned banks from classifying the company’s accounts as non-performing assets.
The court’s limitation on lenders is also lifted as a result of the final verdict in the case. A complete copy of the court’s decision is pending.
In 2008, Reliance Infrastructure signed a contract with Delhi Metro to operate the country’s first private city rail project until 2038.
Following disagreements over fees and operations in 2012, Ambani’s company ceased operations of the capital’s airport metro project and filed an arbitration complaint against Delhi Metro, alleging contract violations and seeking a termination fee.
Meanwhile, Mukesh Ambani’s Reliance Industries Limited (RIL) is having a fantastic week, with its stock price reaching new highs.
Investors are flocking to Reliance Industries (RIL) stock, believing in the company’s growth story, thanks to visible progress on the front of the Reliance Aramco deal, Reliance Jio’s rapidly growing digital footprint, Reliance Retail’s healthy growth prospects, and the company’s plans in the renewable energy business.
On September 6, the stock surged 4% to a new all-time high of Rs 2,479.85 on the BSE, with a year-to-date gain of 25%. (YTD). Experts point out that such a large rise in a heavyweight like Reliance Industries is significant and signals high optimism about the company’s growth potential.
After Reliance Infra wins the case experts point out that the stock’s run isn’t over yet, as the stock’s fundamental outlook says it might go even higher.
