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Informist, Wednesday, Nov. 27, 2024

 

--HC notice to Delhi, Mumbai airports on AAI pleas against arbitral award 

--Delhi, Mumbai airports to HC: Won't enforce arbitral award till next order 

--CONTEXT: HC 1-judge bench upheld award in favour of Delhi, Mumbai airports 

--HC to hear AAI's pleas against Delhi, Mumbai airports on Jan 29 

 

NEW DELHI – A division bench of the Delhi High Court on Wednesday issued notices to GMR Airports Ltd.'s subsidiary Delhi International Airport Ltd and Mumbai International Airport Ltd on a petition by the Airports Authority of India challenging a 2022 arbitral award that had ruled against the latter. The court noted the submission by the two airports that they would not enforce the arbitral award till further orders. The court will next hear the case on Jan. 29.

 

In 2022, as per the arbitral award, the Airports Authority was directed to refund the excess amount of annual fee paid by Delhi International Airport and Mumbai International Airport by mistake. This was upheld by a single judge of the high court on Oct. 18. "...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," Justice Yashwant Varma had said. Challenging this, the Airports Authority moved the division bench on Wednesday. 

 

Delhi Airport had sought a total payment of 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. GMR Airports was formerly known as GMR Airports Infrastructure Ltd.

 

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 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 done by 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 said. 

 

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

 

The dispute arose in the 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, 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 an error--in February 2016 for Delhi Airport and in January 2019 for Mumbai Airport.  End

 

At 1305 IST, shares of GMR Airports Infrastructure were up 1.9% at INR 81.70 on the National Stock Exchange.  End

 

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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