Reliance Infra up 7% as Calcutta HC upholds Rs 780 crore arbitration award
Source: Business Standard
Reliance Infra share price was up 6.07 per cent at Rs 342.55 per share on the BSE
Reliance Infrastructure share price rose as much as 7 per cent on Monday, registering an intraday high of Rs 344.9 per share on the BSE. The Reliance Infra share climbed after the High Court of Calcutta ruled its judgment in favour of the Anil-Ambani-led company in a petition against the arbitration award amounting to Rs 780 crore.
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“This is to inform that on September 27, 2024, the Division Bench of High Court of Calcutta delivered its judgment in a petition filed by Damodar Valley Corporation (DVC) challenging the arbitration award under Section 34, dated September 29, 2023, amounting to approximately Rs 780 crore including accrued interest in favour of the company concerning the Raghunathpur Thermal Power Project,” the filing read.
The filing further said that the court directed the release of the Rs 600 crore bank guarantee (BG) provided by Reliance Infra.
“The Division Bench of the High Court, with the exception of relief on pre-award interest and reduction in rate of interest on BG totalling to Rs181 crore and upheld the Award, totalling approximately Rs 780 crore, including accrued interest. In addition, the BG of Rs 600 crore will also be released,” the filing read.
Reliance Infrastructure was the Engineering & Construction contractor for Damodar Valley Corporation’s 2×600 MW Raghunathpur thermal power project in West Bengal commissioned in 2012.
In 2019, during the execution of the Raghunathpur thermal power project, Reliance Infrastructure faced numerous challenges such as non-availability of land, hindrances at the project site on account of local agitations, unavailability of inputs from DVC viz. water and coal, etc.
Reliance Infra had received the arbitration award amounting to Rs 1,250 crore against DVC. A three-member Arbitration Tribunal unanimously gave the award in favour of Reliance Infrastructure on December 21, 2019.
As per the filing dated December 23, 2019, despite such hindrance, the company commissioned the project. Unit 1 was commissioned on May 15, 2015, and Unit 2 was commissioned on February 23, 2016.
However, DVC sought to levy liquidated damages upon the company for failure to adhere to the contractual schedule.
In the past one year, Reliance Infra shares have gained 86.4 per cent against BSE Sensex’s rise of 30 per cent.
First Published: Sep 30 2024 | 12:21 PM IST
