Delhi High Court Verdict In Airports Authority Of India Case Is A Renewed Call To Uphold The Spirit Of The Arbitration Act

Almost all weekend conferences on Arbitration- organized with the intent to promote India as a 'hub for arbitration'- witness stakeholders coming together to call for increased predictability vis-à-vis enforcement of arbitral awards. Amidst most courts favoring judicial interference, the recent decision of the single-judge bench of the Delhi High Court dated 18.10.2024 in Airports Authority of India versus Delhi International Airport Ltd/Mumbai International Airport Ltd 17/2023), while upholding the majority opinion of the arbitral tribunal, reposes much required confidence in the adjudication process of the tribunal. Brief Overview of the Dispute The dispute in the present case revolves, inter alia, around the definition of the terms 'Revenue' and 'Projected Revenue' under the Operation, Management and Development Agreement executed between AAI and the Delhi International Airport Ltd/Mumbai International Airport Ltd, as also the computation of the 'Annual Fee' payable to AAI and the heads of income which were liable to be excluded therefrom. The JVCs pointed out that it had been their consistent case that computation of 'Annual Fee' revolves around the contractual obligation of providing 'shareable revenue' and in order to identify the streams of income which would form part of 'shareable revenue', the tribunal had no option but to examine the concepts of 'Projected Revenue' and 'Business Plan' which stood incorporated in the OMDA. An award would be equally susceptible if it ignores the evidence on record or where its conclusion be ex facie contrary to the uncontested terms of the contract.” Having done so, Justice Varma proceeded to hold that the view taken by the majority was based on a cumulative consideration of the legislative objective of the Act, the envisaged commercial enterprise agreed between the parties and the rule of business efficacy.