Mumbai International Airport Limited (MIAL) has dragged the Airports Authority of India to the Delhi High Court over a dispute on use of a property adjacent to the airport. This comes after an arbitration tribunal refused to rule in favour of MIAL.

The issue dates back to 2006 when MIAL had signed the Operation, Management and Development Agreement (OMDA) with Airports Authority of India for operating the airport at Mumbai. At that time AAI already had a leasing agreement with Air India’s Hotel Corporation of India for use of land near the airport. MIAL has claimed that once the OMDA was put in place, all previous agreements by AAI related to land use should be novated or transferred in its favour. AAI, however, contended that Existing Leases were specifically carved out from the land granted to MIAL in 2006. MIAL then filed a plea with an Arbitral Tribunal which ruled in favour of AAI. Now, MIAL has appealed in the Delhi High Court challenging the tribunal’s verdict.

MIAL has claimed that it is entitled to a novated lease which is currently held by Air India’s Hotel Corporation of India.

“The dispute between MIAL and AAI is regarding the interpretation of the concession agreement. More specifically it is regarding a lease which is part of the airport premise. MIAL, not agreeing to the order of the Arbitral Tribunal, has challenged the matter in the Delhi High Court,” said a source.

Another senior official in the know said “MIAL had argued that they are contractually entitled to have that novieted in their favour and was part of their OMDA. However, the tribunal held that the dispute is not arbitrable because the property is currently being held by a third party. The tribunal said that without hearing the third party, it could not pass the order in favour of MIAL.”

MIAL has roped in P Chidambaram to argue its case, AAI is being represented by Tushar Mehta, Solicitor General of India.

“This case will affect many such land parcel grants. This parcel itself is quite substantial, and its commercial value is quite significant. There are similar other disputes that are pending as well,” said a source.

The Delhi High Court has issued the notice to AAI which was accepted by its advocate, Raghav Shankar. Shankar has been asked to file a response, if any, before July 15. The court will now hear the matter on July 30.

comment COMMENT NOW