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A division Bench of the Calcutta High Court upheld an arbitration award in favour of Reliance Infrastructure (RInfra) on Friday while delivering its judgment on a petition filed by Damodar Valley Corporation (DVC), challenging the award concerning the Raghunathpur Thermal Power Project, RInfra said in a statement to the exchanges.
DVC had filed the petition in September 2023.
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The arbitration award is worth around Rs 780 crore, including accrued interest and, in addition, bank guarantees of Rs 600 crore will also be released, according to the company’s stock exchange filing.
The court upheld the award with an “exception of relief on pre-award interest and reduction in rate of interest on bank guarantee totalling to Rs 181 crore”, the company statement noted.
Reliance Infra has stated that it is currently conducting a detailed review of the judgment and will proceed based on legal advice. It will either enforce the award to the extent upheld or challenge the judgment dated September 27.
According to the company’s annual report for FY24, it initiated and won arbitration against DVC in December 2019. DVC was then directed to pay Rs 898 crore and release bank guarantees worth Rs 354 crore with the Calcutta High Court.
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“The company withdrew the cash amount deposited by furnishing bank guarantee, which was appropriated by its lenders in lieu of providing such bank guarantees.”
In September 2023, the high court upheld the award except on “four issues,” and the matter was then pending before the Bench with both parties filing appeals.
The Raghunathpur project, based in West Bengal, was awarded to RInfra by DVC in December 2007 through an international competitive bidding (ICB) process.
The project of capacity 2x600 megatwatt (Mw) was being set up by DVC under the mega power policy of the Centre.
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