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In a significant victory for Reliance Infrastructure’s subsidiary, Mumbai Metro One Pvt Ltd (MMOPL), the Bombay High Court on Tuesday directed the Mumbai Metropolitan Region Development Authority (MMRDA) to deposit, with its registry, Rs1,169 crore within four weeks. This follows an arbitral award in MMOPL’s favour, and the funds will help reduce its debt.

MMOPL, which operates Mumbai Metro Line 1 (Versova–Andheri–Ghatkopar), is a joint venture between Reliance Infra (74%) and MMRDA (26%).

The court passed this order while hearing MMRDA’s plea for an unconditional stay on the arbitral award dated August 29, 2023 (corrected on February 26, 2024). MMRDA has challenged the award under Section 34 of the Arbitration and Conciliation Act.

The dispute arose from cost escalations and delays in the metro project, governed by a 2007 Concession Agreement. MMOPL claimed the project cost rose from Rs2,356 crore to Rs4,321 crore due to delayed clearances and revised construction needs.

The arbitral tribunal, by a 2:1 majority, awarded MMOPL compensation under several heads, including withheld Viability Gap Funding (VGF), interest on delayed payments, rent, operations and maintenance costs, and cost escalations.

MMRDA called the award “patently illegal and perverse” and sought that the dissenting arbitrator’s view be accepted. Its counsel, senior advocate JP Sen, argued that claims such as rent were outside the tribunal’s jurisdiction and should have gone to the Small Causes Court. He also said the award was based only on MMOPL’s financial statements.

MMOPL’s counsel, Prateek Seksaria, countered that MMRDA’s nominee directors had approved the financials and board decisions. MMRDA could not now disown the facts it had previously accepted, he said.

Justice Somasekhar Sundaresan noted the award resembled a money decree and could not be unconditionally stayed unless fraud or corruption was shown. “This is not a case where audited financial statements of one side are blindly relied upon… MMRDA is not an outsider, but an equity stakeholder with nominee directors in MMOPL’s governance,” he observed.

The court directed MMRDA to deposit the full amount by July 15, 2025. If done, the award’s execution will remain stayed during the hearing in its appeal. The case is listed for hearing on June 17, 2025.

Following the court's order Reliance Infra led Metro One, has made a disclosure to the Bombay Stock Exchange (BSE) on Tuesday, which reads, "This direction was issued in proceedings initiated by MMRDA under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral award... The award was passed by a three-member arbitral tribunal in favor of Mumbai Metro One Private Limited -a joint venture between the Company (holding 74% stake) and MMRDA (holding 26% stake)-which operates the Versova-Andheri-Ghatkopar metro corridor in Mumbai. The award granted MMOPL a sum of Rs 992 crore along with interest."

The official of MMRDA replied, "The court has passed its order and the official copy of which is awaited. MMRDA will thoroughly examine the contents of the order and take appropriate action accordingly."

Meanwhile, there is another matter of arbitration award wherein MMRDA has asked MMOPL to pay Rs 100 crore as part of initial fixation of fare. The matter is pending before the HC. the HC is also seized of another case of Metro One with regards to increasing the metro ticket fare recommended by the fare fixation committee.