Reliance Infra wins arbitration award against DMV

Reliance Infrastructure informed the exchanges on winning a major arbitration award of Rs 1,250 crore against Damodar Valley Corporation (DVC), which is a Government of India undertaking.

Reliance Infrastructure was the Engineering & Construction contractor for Damodar Valley Corporation's 2x600MW Raghunathpur thermal power project in West Bengal commissioned in 2012. Reliance Infrastructure had faced various hindrances at the project site, such as non-availability of land, local agitations, unavailability of water and coal inputs from DVC, etc. The company had raised several claims on DVC for delay and hindrances faced by it in execution of the project. But DVC sought to levy liquidated damages upon the company for failure to adhere to the contractual schedule following which Reliance Infrastructure invoked arbitration.

The case resulted in favor of Reliance Infrastructure, the Arbitration Tribunal directed DVC to pay Rs 896 crore and return the Bank guarantees of Rs. 354 crore within four weeks or pay additional interest, at the rate of 15 per cent per annum for any delay in payment beyond four weeks to Reliance Infrastructure. The company stated that the proceeds will be used to pay lenders and reduce the debt of the company.

Reacting to this news, the stock of the company on Monday closed at Rs 24.25, up by 4.98 per cent or Rs 1.15 per share. The 52-week high is Rs 325.10 and 52-week low is Rs 18 on the BSE.