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Informist, Friday, Oct. 18, 2024

 

NEW DELHI – The Delhi High Court Friday upheld an arbitral award asking the Airports Authority of India to refund the excess amount of annual fee paid by Delhi International Airport Ltd and Mumbai International Airport Ltd by mistake. The high court also rejected the Airports Authority's request to stay the award for two weeks, saying a stay was not appropriate once the final orders had been passed.

 

"...the court finds no ground to interfere with the awards as rendered. The petitions under Section 34 (of the Arbitration and Conciliation Act, 1996) shall, consequently, stand dismissed," said Justice Yashwant Varma.

 

The Delhi Airport had sought a payment of a total INR 105.37 billion from the Airports Authority along with further interest on the amount from Oct. 1, 2018, till it is returned. It had also sought further amounts, which were to be quantified, towards the return of the annual fee paid by it from Oct. 1, 2018 till payment of the money along with interest.

 

The Mumbai Airport had sought a payment of INR 35.83 billion as of Mar. 31, 2018, along with excess payment towards annual payment made by it of INR 5.85 billion for the year ended Mar. 31, 2019. It sought a further amount of money paid in excess thereafter, along with interest.

 

The arbitral tribunal had said that to arrive at the actual figure liable to be deducted from the total receipts of the airport operators under aeronautical and non-aeronautical charges, it requires a very careful examination of their accounts from Jun. 21, 2015. Therefore, such examination shall be undertaken by the independent auditor to determine the actual amounts liable to be deducted for the period commencing from Jun. 21, 2015 to the date of this award, the tribunal had said. It had said that once such determination is made by the auditor, the annual fee payable by operators for each succeeding financial year commencing from Jun. 21, 2015, is required to be re-calculated by the independent auditor. The difference between the actual amounts already paid towards the annual fee by the operators for each of the above-mentioned years and the amount determined by the independent auditor as annual fee is liable to be refunded. However, such amounts must be credited to the airport operators while computing the annual fee payable by the operators in future, it added.

 

The case has its genesis from operation, management and development agreements signed between the Airports Authority and two airport operators in 2006. One of the central provisions of the agreement was related to the annual fee which was payable by the airport operators to the Authority and constituted the revenue-sharing model among the principal stakeholders. 

 

The dispute arose in light of the Airports Authority and the airport operators holding divergent views with respect to the scope and meaning of the term "revenue" in the agreements. The operators said they had been paying the annual fee on the basis of the gross receipts credited to their respective profit and loss accounts, which comprised charges for aeronautical services, charges for non-aeronautical services, and other income. The operators argued that the annual fee incorrectly came to be remitted on the basis of gross receipts instead of the amount of revenue as projected in the business plan.

 

Both the operators continued to pay annual fees on the basis of the gross receipts credited to their individual profit and loss accounts till they allegedly discovered a mistake, in February 2016 for Delhi Airport and in January 2019 for Mumbai Airport.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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