High Court partly allows MMRDA plea against MMOPL in Metro-1 arbitration case

The Bombay High Court has partly allowed a petition filed by the Mumbai Metropolitan Region Development Authority (MMRDA), setting aside portions of an arbitral award granted in favour of Mumbai Metro One Private Limited (MMOPL) in connection with the Versova–Ghatkopar Metro-1 project.

In a judgment delivered on February 24, 2026, Justice Sandeep V. Marne examined the August 29, 2023 award passed by a three-member arbitral tribunal arising out of the 2007 Concession Agreement governing the corridor.

The majority tribunal had awarded over Rs 496 crore with interest to MMOPL and rejected MMRDA’s counterclaims, prompting the authority to challenge the award under Section 34 of the Arbitration and Conciliation Act before the High Court.

MMOPL, a joint venture in which Reliance Infrastructure Limited, led by Anil Ambani, holds a 74 per cent stake and MMRDA holds 26 per cent, operates Mumbai’s first metro corridor.

The company had claimed that delays in handing over the Right of Way (ROW) and removal of encumbrances led to substantial cost escalation. It sought compensation under several heads, including increased project costs, additional overheads, financial expenses and deductions relating to Viability Gap Funding (VGF).

The project was initially estimated to cost Rs 2,356 crore and was to be completed within five years. However, commercial operations began in June 2014 after delays and cost overruns.

Before the High Court, MMRDA argued that the tribunal had misinterpreted the Concession Agreement and awarded damages contrary to the contractual framework.

The court reiterated the limited scope of interference in arbitral awards, observing that it was not sitting in appeal and could not re-appreciate evidence. It upheld the tribunal’s finding that delays in providing the right of way and casting-yard land were attributable to MMRDA and had resulted in increased project costs. The court agreed that MMOPL was entitled to monetary compensation over and above the extended concession period.

However, significant relief was granted to MMRDA after the court struck down three major heads of compensation. The judge held that MMOPL had failed to produce evidence that was within its power to place on record, and the tribunal had erred in awarding damages on what amounted to conjecture.

“Where production of evidence is possible, but the claimant fails to produce the same, the Tribunal cannot take the alternative route of guesswork and award the claim for damages merely on surmises,” the court observed. “Guesswork cannot be a shortcut for the production of evidence. Guesswork can be undertaken only when it is impossible to compute the exact quantum of losses suffered by the injured party.”

The court permitted the parties to submit to the registry a recalculation of the exact amount payable to MMOPL under the modified award. It directed that the revised sum be released in terms of the financing documents, but only after eight weeks from the date of the judgment.

- Ends

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