As my memory serves (and I am sure that I will be corrected), the line in the gorge was not originally narrow gauge. ATSF won the rights here as they did with the Raton Pass. However, the line quickly had a third rail added as part of the early court interactions to help defuse the hostilities.
Then, ATSF gained control of the D&RG and began ordering their own narrow gauge equipment. The Supreme Court stepped in and said that ATSF could not own/control the D&RG and made a permanent solution. The ATSF retained the Raton Pass and D&RG retained the Royal Gorge.
This is based on memory as I am not sure where my research on this particular subject is located. However, great pictures and information.
Phil