MUMBAI, Oct. 25 -- The Bombay High Court has refused to stay a June 2025 arbitral tribunal order directing the Mumbai Metro Rail Corporation Limited (MMRCL) to pay Rs.250 crore to the L&T-STEC joint venture company which designed and constructed tunnels and stations for the metro rail network. The arbitration award was neither "facially untenable", nor "undermined by patent illegalities", a single judge bench of Justice Somasekhar Sundaresan observed on October 10 and directed the MMRCL to deposit the amount within eight weeks. The court also allowed L&T-STEC to withdraw the amount along with accruals by providing an unconditional bank guarantee for the same amount. The dispute between the two companies arose over a contract awarded to L&T-STEC to design and construct specific stations and tunnels. The contract was awarded in May 2015, before the enactment of the Goods and Services Tax (GST) Act in 2017. Since fiscal benefits and exemptions that could be availed via indirect taxes were subsumed into GST, the MMRCL pressed for reimbursement from the joint venture firm on two counts - impact of change in law and compensation for "additional work" to install stronger earth-retaining structures. With L&T-STEC contesting the claim, the dispute was referred to arbitration. In June 2025, the three-member arbitral tribunal by majority ordered the MMRCL to pay Rs.250.82 crore to the contracted firm, including Rs.229.56 crore towards reimbursement for levy of GST introduction between July 1, 2017 and September 30, 2022, and Rs. 21.26 crore for undertaking additional work, outside the scope of the contract. The MMRCL then approached the high court, pressing for an unconditional stay on the execution of the award. Appearing for MMRCL, advocate general Dr Birendra Saraf submitted that the tribunal had failed to ascertain the precise impact of introduction of the GST regime on the contract price. The tribunal had also added certain tax exemptions to elements unconnected to construction, such as housekeeping and refurbishment, and ignored the MMRCL's witness statement, choosing to rely selectively on the cross-examination of certain witnesses, the advocate general said. A single judge bench of justice Sundaresan, however, held that the tribunal's findings were not perverse or arbitrary as the award was in line with the dispute adjudication board's (DAB) report and provided adequate reasons for the conclusions drawn. Considering that the award was in the nature of a money decree, an unconditional stay could have only been possible only if the award was unsustainably unreasonable, the court said....