Reliance Infrastructure Assures HC of not Creating Third-Party Rights in Over INR 900 Cr Assets

Reliance Infrastructure Assured Delhi HC “ It Wouldn’t Create any Third Party Rights over Assets Worth Rs 995 Crore Till the Hearing.

On Monday, Following a plea filled by Shanghai Electric Group, Reliance Infrastructure assured the Delhi HC that, it would not create any third party rights over assets worth Rs 995 crore till the next date of hearing. The statement recorded by Single Judge Bench of Justice Rekha Palli reads as follows. 

"..senior counsel for the respondent reiterates that the respondent had assured this Court on 24.12.2020 that till the next date, the respondent will not create any further third party rights in its assets valued at Rs.995 Crores, which assets will be available for appropriate orders being passed by this Court in case the need so arises.".

The Court, earlier this month had directed Reliance Infrastructure to maintain status-quo regarding its shareholding in BSES Yamuna Ltd and BSES Rajdhani Ltd. Reliance Infrastructure had an agreement with Shanghai Electric Group for engineering and manufacturing of power plants. Subsequently, Shanghai Electric Group invoked arbitration against Reliance infrastructure on the basis of its failure to pay for the purchased equipment.

The arbitration was invoked as per the Singapore International Arbitration Centre Rules for alleged default of $135.3 million or Rs 995 crores.

Shanghai Electric Group in the meantime approached the HC under Section 9 of Arbitration & Conciliation Act, seeking a direction to Reliance Infrastructure to furnish security of Rs 995 crores which corresponds to the minimum amount that is payable to it under the SIAC Arbitration.

Further, the Shanghai Electric Groups sought a direction to Reliance Infrastructure to disclose on affidavit, the details and status of its assets, whether movable and immovable properties, located within India or outside India, as on the date on of the Guarantee Letter and the date of filing of the petition. Further, the Disclosure with respect to any ongoing transactions entered into by Reliance Infrastructure for sale of its assets was also sought, which could pose a threat to the realization of monies likely to be awarded in the ongoing arbitration.

Reliance Infrastructure has opposed the petition for being not maintainable.