0

Section 9 of the Arbitration and Conciliation Act, 1996 vests wide powers with the Court for granting interim orders, at all stages of an arbitration proceeding: Delhi High Court.

Section 9 of the Arbitration and Conciliation Act, 1996 said that a party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court. The judgment was given by the High court of Delhi in the case of Narangs International Hostel private limited vs. Delhi International Airport Limited. Case No: [294/2021 & I.A. 10860/2021]

By the Hon’ble Mr. Sanjeev Narul Justice. The counsel for petitioner was Mr. Kapil Sibal & Mr. Akhil Sibal and counsel for respondent represented by Dr. Abhishek Manu Singhvi, Senior Advocate with Mr. Anuj Berry, Mr. Chaitanya Safaya, Mr. Amit Bhandari and Ms. Prerna Acharya, Advocates.

The International Airports Authority of India granted lease of airport land to NIHPL for the “purpose of carrying on flight catering business at the Delhi Airport, Palam” for a period of 30 years (ending on 31st August 2011), by way of a Lease Deed dated 20th August, 1982. Clause 19 of General Condition of contract contained an arbitration clause. DIAL became AAI’s successor-in-interest for the Original Lease Deed by way of an Operations, Maintenance and Development Agreement dated 04th April 2006, executed between AAI and DIAL, in respect of IGI Airport. The Original Lease Deed also provided “an option of extension upto 10 years” in its recital. A meeting was held between NIHPL, DIAL & AAL where lease was extended for a period of 10 year. NIHPL contends that shortly thereafter, DIAL started pressurizing it to enter into a license agreement instead of the lease, and threatened to disallow access of airport to NIHPL for providing in-flight catering services. In 2016, once again, faced with DIAL’s denial of access to the Airport, NIHPL approached this court by way of a writ petition, which was disposed of by recording statement of DIAL that the Original Lease Deed stands extended till August 2021 and that DIAL would extend the necessary permits and passes for access to the Airport premises.

The counsel for petition said that DIAL had been constantly pressurizing NIHPL to enter into a license agreement even the fact that DIAL & NIHPL are signatories’ member wherein, the parties agreed to extend the original lease deed for a period of 10 year. Even after entering into the agreement dated 2009 as well as the SLA dated 17th May 2013 with NIHPL, DIAL has been taking a dishonest stand that there is no valid lease, and hence, NIHPL must enter into a license with DIAL on terms divergent from the subsisting lease. The counsel further stated that the livelihood of 1500 employees along with their families will be at stake, if relief is not granted to NIHPL with immediate effect. The counsel for respondent said that, there is unexplained delay and laches on the part of NIHPL in not approaching the court earlier. The counsel further said that the SLA is void and invalid, and thus NIHPL has no right to seek extension of the lease. The counsel said that in terms of Section 14(d) of the Specific Relief Act, 1963, a determinable contract cannot be specifically enforced, and therefore an interim injunction cannot be granted.

The court analysis and find that, for grant of relief of injunction, the court is guided by the principles applicable to Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908. In order to succeed, NIHPL has to meet the three-pronged tests of “(i) prima facie case, (ii) balance of convenience and (iii) irreparable harm or injury”. The Court must also be mindful that jurisdiction at the pre-arbitration stage is to be exercised only to ensure that an award passed by an Arbitrator should not be rendered in fructuous. In other words, interim order should only be passed in aid of the imminent arbitration proceedings. In order to agree on an extension, the parties have to imperatively arrive at a consensus on mutually agreed terms – i.e., the parties have to be ad idem. Clause 2 cannot be interpreted to mean that NIHPL can compel DIAL to sit at the negotiating table, much less enter into a contract. Parties have an opportunity to extend the lease on mutually agreed terms, but DIAL’s choice to not negotiate an extension is entirely its own business decision, and the court cannot compel it otherwise. DIAL cannot be compelled to enter into a contract, most certainly not by this court, while exercising jurisdiction under Section 9 of the Act. Even if that relief is left for adjudication in arbitration, in the absence of a prima facie right in favor of NIHPL, there is still no justification to be found to grant an interim relief of the nature as sought in the petition. The Court does not find any merit in the present petition and accordingly, the same is dismissed. The pending application also stands disposed of.

 

Click here to read the judgment

Leave a Reply

Your email address will not be published. Required fields are marked *

Open chat