Delhi High Court
Airports Authority Of India vs Mumbai International Airport Limited & … on 7 March, 2025
Author: Dinesh Kumar Sharma
Bench: Dinesh Kumar Sharma
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON - 23.01.2025.
% PRONOUNCED ON - 07.03.2025.
+ O.M.P. (COMM) 185/2024
AIRPORTS AUTHORITY OF INDIA .....Petitioner
Through: Mr. Tushar Mehta, Learned SGI with
Mr. Karan Lahiri, Mr. Prateek Arora,
Ms. Rishieka Ray, Advs.
versus
MUMBAI INTERNATIONAL
AIRPORT LIMITED & ANR. .....Respondents
Through: Mr. Rajiv Nayar, Sr. Adv with Ms.
Niyati Kohli, Mr. Mahesh Agarwal,
Mr. Rishi Agrawal, Mr. Pratham Vir
Agarwal, Mr. Sanjeev Sheshadri,
Advs.
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
JUDGMENT
S. No Particulars Page Nos. A. Preface 2 B. Factual Matrix 3-13 C. Submissions on behalf of 13-29 Petitioner D. Submissions on behalf of the 29-33 MIAL E. Finding and Analysis 34-67 Signature Not Verified O.M.P. (COMM) 185/2024 Page 1 of 67 Signed By:NIDHI Signing Date:07.03.2025 18:39:50 DINESH KUMAR SHARMA,J : (A) PREFACE:
1. The present petition has been filed under Section 34 of the Arbitration
and Conciliation Act, 1996, (hereinafter referred to as ‗Act’)
challenging the impugned arbitral award dated 21.12.2023 as corrected
under Section 33 of the Act vide order dated 16.01.2024.
2. Airport Authority of India (hereinafter referred to as ‗AAI’ or
‗Petitioner’) is a statutory authority established under the Airports
Authority of India Act, 1994, responsible for maintaining and
managing civil aviation infrastructure in India.
3. Mumbai International Airport Limited (hereinafter referred to as
‗MIAL’ or ‗Respondent No.1′) is a joint venture entity entrusted with
the operation, management, and development of Chhatrapati Shivaji
Maharaj International Airport, Mumbai (‘CSMIA’) under an Operation
Management and Development Agreement (hereinafter referred to as
‗OMDA’) dated 04.04.2006 executed between AAI and MIAL.
4. State Bank of India, (hereinafter referred to as ‘SBI’ or ‘Respondent
No.2’) a public sector bank and the designated escrow agent under the
Escrow Agreement executed as part of the financial arrangement
governing the OMDA.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 2 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
(B) FACTUAL MATRIX:
5. Briefly stated the factual matrix of the case as stated in the present
petition is that in March 2020, upon the outbreak of the COVID-19
pandemic and subsequent governmental restrictions aviation operations
were severely disrupted. Consequently, MIAL issued a Force Majeure
notice on 17.03.2020 under Article 16 of the OMDA, claiming that the
pandemic constituted a Force Majeure event from 13.03.2020. MIAL
sought suspension of its Annual Fee (‗AF’) obligations, citing an
adverse financial impact. The said notice was responded by AAI on
24.03.2020, requesting MIAL to provide a Business Plan reflecting the
financial impact of the pandemic. On the same day, MIAL requested
AAI to instruct SBI within 24 hours to halt transfers from the Proceeds
Account to the AAI Fee Account and instead transfer funds to the
Surplus Account for operational expenses. AAI, in its reply dated
25.03.2020, pointed out that MIAL’s request for a 24-hour response
was inconsistent with the 15-day response period stipulated in the
OMDA and sought financial records to substantiate MIAL’s force
majeure claims.
6. On 26.03.2020, MIAL submitted financial statements showing its fund
position and urgent pending payments but failed to provide supporting
audited records. AAI, upon review, noted that INR 65 crores allocated
for debt servicing was unnecessary due to the Reserve Bank of India’s
loan moratorium and concluded that MIAL had sufficient financial
capacity to meet its obligations.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 3 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
7. On 30.03.2020, MIAL’s Board of Directors unilaterally declared
COVID-19 a Force Majeure event without conducting a financial
impact assessment. On the same day, AAI formally disputed MIAL’s
Force Majeure claim but, as a goodwill gesture, permitted deferment of
the Monthly Annual Fee payments for April-June 2020, requiring the
deferred amounts to be paid by 15.07.2020. AAI also instructed SBI to
transfer INR 82 crores from the AAI Fee Account to the Surplus
Account to aid MIAL in meeting operational costs.
8. On 17.04.2020, MIAL reiterated its position, contending that its
obligation to pay the Annual Fee should be suspended. AAI, in its reply
dated 30.04.2020, refuted this assertion, emphasizing that an obligation
capable of being performed could not be suspended under Chapter XVI
of the OMDA. AAI rejected MIAL’s interpretation that payment
obligations should remain suspended until pre-pandemic revenue levels
were restored.
9. MIAL subsequently initiated arbitration against AAI, leading to the
constitution of the learned Arbitral Tribunal (hereinafter referred to as
‘AT’) on 17.12.2020. Prior to the constitution of the learned AT, on
09.07.2020, MIAL filed a petition under Section 9 of the Act before the
Delhi High Court, seeking to restrain AAI from accessing funds in the
Escrow Account. The Court, vide order dated 27.11.2020, directed that
38.7% of MIAL’s revenue be deposited in the Escrow Account but did
not issue any directives regarding past dues. This order was later
modified by the Division Bench on 14.01.2021, requiring MIAL to
maintain INR 153 crores in an interest-bearing account with SBI to
secure AAI’s claim for unpaid dues.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 4 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
10. MIAL filed its Statement of Claim on 01.03.2021 and on the same day
it communicated to AAI that the Force Majeure event had ceased. AAI
filed its Statement of Defence and Counterclaims on 15.06.2021, and
MIAL filed its response to AAI’s Counterclaims on 05.08.2021.
11. During the arbitration proceedings, both parties filed applications under
Section 17 of the Act and learned AT vide order dated 28.06.2021,
partially allowed MIAL’s application while rejecting the application
u/s 17 of the Act filed by AAI, directing that while MIAL was to set
aside AAI’s revenue share, AAI was restricted from utilizing the funds.
12. Through a Procedural Order dated 09.08.2021, the learned AT framed
the following issues for determination:
(i) Whether MIAL was entitled to the claims and reliefs sought in the
proceedings.
(ii) Whether AAI, as the respondent and counterclaimant, was entitled
to the counterclaims and reliefs sought.
(iii) Whether either or both parties were entitled to interest on their
claims, and if so, for what period and at what rate.
(iv) Whether either or both parties were entitled to costs on their
respective claims, and if so, for what amounts.
13. Final arguments were heard in November 2022 and the learned AT
reserved its award 18.01.2023. An extension for the mandate of the
learned AT under Section 29A(3) of the Act was sought and granted
until 31.08.2023. Subsequently, another extension was granted on
24.08.2023, extending the mandate until 01.12.2023.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 5 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
14. Learned AT delivered the arbitral award on 21.12.2023, which was
formally pronounced on 06.01.2024 and thereafter vide order dated
16.01.2024, the learned AT passed an Order under Section 33 of the
Act suo motu correcting the ―stenographical errors” in the Impugned
Award dated 21.12.2023.
15. In the above background, the petitioner has sought to assail the
impugned arbitral award on the grounds that it conflicts with the public
policy of India, violates fundamental principles of justice and morality,
and suffers from patent illegality. The grounds for challenge as stated
in the petition are as follows:
a. Learned AT ignored vital evidence on record, including but not
limited to relevant documentary and oral evidence particularly the
extensive evidence demonstrating MIAL’s ability to pay the AF,
relying on MIAL’s own documents and oral evidence. Learned
AT disregarded the entirety of this evidence, which forms no part
of the impugned award.
b. Learned AT has not only rewritten the contract, but has also
rendered certain contractual provisions ineffective. The impugned
award nullifies Articles 16.1.1 and 16.1.2(e) of the OMDA by
removing the requirement of demonstrating ‗inability to perform
obligations’ to claim the benefit of Force Majeure. Furthermore,
learned AT has not only failed to examine whether the notice was
issued in compliance with the provisions of OMDA, but instead
has altogether deleted the requirement of a notice under Article
16.1.5(a) of the OMDA. The award effectively deletes this
provision by treating the occurrence of a pandemic and
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 6 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
government recognition of the same as co-equal to the issuance of
a notice by MIAL under Article 16.1.5(a) of the OMDA.
c. The interpretation of the contract contained in the impugned
Award is not even a possible view of the contractual terms, which
are explicit, unambiguous and irreconcilable. Learned AT rejected
the submission of AAI that since AF is calculated as a percentage
of revenue, it remains proportionate to revenue and is always
capable of being paid and held that that it would be too simplistic
to require MIAL to pay 38.7% of its earnings without considering
its obligation to ensure smooth airport operations. It has been
stated that the said interpretation of AAI was based on the plain
and literal reading of Articles 11 and 16 of the OMDA and the
decision of the learned AT is in the teeth of contractual provisions.
Further, the learned AT’s finding that the occurrence of a Force
Majeure event is indisputable contradicts the express terms of the
contract and disregards AAI’s contention that the Covid-19
pandemic alone does not justify relief for MIAL unless all
requirements under Chapter XVI are met. While the pandemic
qualifies as a physical event under Article 16.1.3(vii), it can only
constitute Force Majeure if it satisfies the conditions set forth in
Articles 16.1.1 and 16.1.2. MIAL failed to demonstrate its
inability to perform a specific obligation, a key requirement under
these provisions. By ignoring these contractual conditions and
treating the pandemic itself as Force Majeure, the learned AT
arrived at a conclusion that no fair or reasonable person could
have reached.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 7 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
d. Learned AT has violated the letter and spirit of Section 28(3) of
the Act and effectively rewritten Article 11 which required MIAL
to pay 38.71% of its ‗Revenue’ to AAI. The definition of
‗Revenue’ and the language of Article 11 is clear and
unambiguous and provides that payment of AF was not contingent
on whether MIAL generated profits or incurred losses. The AT
has erroneously converted the revenue-sharing mechanism
contemplated under the OMDA into a profit-sharing contract by
holding that, during the Force Majeure period, revenue receipts
would first be used for running the airport, and only the surplus, if
any, would be shared between MIAL and AAI in the contractual
ratio
e. The impugned award has rewritten Chapters XVI and XVIII of the
OMDA by allowing an extension of the OMDA term for a period
commensurate to 13.03.2020 till 28.02.2022. Even assuming, on a
demurrer, that MIAL was entitled to the benefit of the Force
Majeure clause, the relief of extension of the contract term finds
no mention in the Force Majeure clause itself. There is no
contractual basis whatsoever for extending the concession period,
and the award provides no reasoning for granting such an
extension.
f. Impugned Award contravenes Section 31(3) of the Act as it fails
to provide reasoning for its findings and leaves key issues
unresolved. A crucial question–whether MIAL was genuinely
unable to pay the Annual Fee–remains unaddressed.
Furthermore, the learned AT failed to determine whether each
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 8 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
installment of the Annual Fee is a separate and distinct obligation,
which, if unpaid on time, would attract interest under Article
11.1.2.2. Learned AT also did not assess whether all conditions
under Article 16.1.2 were met at the time each installment became
due. Additionally, the Impugned Award provides no rationale for
excusing rather than suspending MIAL’s obligation to pay the
Annual Fee, despite explicitly raising the question in the award
itself. Another core issue left unresolved is what constitutes pre-
Covid levels of activity. It has been stated that while the learned
AT rejected MIAL’s argument that Air Traffic Movement
(‗ATM’) and Passenger Traffic Movement (‗PTM’) should define
pre-Covid levels of activity, it failed to provide a clear alternative
standard. Factors such as government-imposed Covid-19
restrictions and MIAL’s alleged negative cash flow are discussed
but not linked to determining pre-Covid activity levels. Learned
AT arbitrarily set 28.02.2022 as the end date for relief based on
the Supreme Court’s order extending limitation under general and
special laws.
g. Impugned Award has altered the very basis on which bids were
invited inasmuch as it alters the ‗key features of the transaction‖’
as recorded in the Judgment of the Supreme Court in Reliance
Airport Developers (P) Ltd. v Airports Authority of India & Ors.,
(2006) 10 SCC 1 by allowing MIAL to be completely excused
from making payment of AF for the period 13.03.2020 to
28.02.2022, the only consideration behind the successful bid and
also by extending the term of the contract which was proposed to
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 9 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
be and finally was, a period of 3 0 years ( extendable for another
30 years at the option of MIAL).
h. Impugned Award altered the waterfall mechanism established in
the Escrow Account Agreement dated 18.04.2018. Under the
Escrow Account Agreement, the Escrow Bank was required to
prioritize deposits as follows: first, statutory dues; second, the
monthly AAI Fee; and third, any remaining balance into the
Surplus Account. This structure clearly established that MIAL’s
obligation to pay the MAF to AAI took precedence over its
operational expenses, except for statutory dues. Learned AT,
however, held that during the Force Majeure period, revenue
receipts should first be used for airport operations, with only any
surplus to be shared between MIAL and AAI, thereby overturning
the agreed-upon financial structure.
i. Learned AT rendered that since force majeure steps in only upon
the occurrence of an unforeseen event caused by a superior or
irresistible force, an act of God, or an event entirely beyond
human control (as opposed to a third-party event) and thus cannot
be covered under Section 32contradicts the public policy of India
as the said interpretation conflicts with settled law, as established
in Associate Builders v. DDA, (2015) 3 SCC 49 (paras 18 and 27)
and reaffirmed in Ssangyong Engg. & Construction Co. Ltd. v.
NHAI, (2019) 15 SCC 131. It has been stated that learned AT
disregarded the binding judicial precedents–despite being made
aware of them
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 10 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
j. Learned AT has granted MIAL relief in excess of what it sought
in its letter dated 17.03.2020. MIAL only sought suspension of its
obligation to pay MAF but learned AT granted complete excusal
from making payment of AF for the period 13.03.2020
to28.02.2022 and also extended the term of the OMDA by a
commensurate period. Learned AT failed to address AAI’s
objection that suspension or excusal of obligations applied only to
those arising during the Force Majeure event which MIAL itself
claimed ended on 11.03.2021, and that only the time for
performing such obligations can be extended. Article 16.1.5(c)
does not determine the right to excusal or suspension of
obligations, which is governed by Articles 16.1.1 to 16.1.3, nor
does it prescribe what relief can be granted under Chapter XVI. It
has been stated that Article 16.1.5(c) applies only when
obligations are suspended–not excused entirely as evident from
the plain and ordinary meaning of the contract’s terms, and any
other view contradicts its clear and unambiguous language.
k. The allocation of Rs. 6.58 Cr. in costs to MIAL is patently illegal
and lacks justification under Indian law. The award on interest is
also unreasoned, patently illegal, and against the fundamental
policy of Indian law.
l. AAI admitted the occurrence of Force Majeure in its letter dated
30.03.2020 is factually incorrect and contrary to the record. The
letter, issued under Article 16.1.5(d) of the OMDA, explicitly
disputed MIAL’s claim that no Annual Fee was payable due to
Force Majeure. While AAI, acting in good faith, granted MIAL an
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 11 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
extension until 30.06.2020 to submit its Annual Business Plan–
given the difficulties cited due to the lockdown and this was a
one-time dispensation and not a recognition of Force Majeure.
Since the Business Plan determines the Annual Fee payable in
monthly installments (MAF), AAI deferred MIAL’s MAF
payments for April-June 2020 until 15.07.2020, without interest,
to align with the revised timeline. However, this was purely a
procedural accommodation, not an acknowledgment of Force
Majeure. The letter expressly rejected MIAL’s entitlement under
Chapter XVI of the OMDA, and the Tribunal’s conclusion that it
amounted to an admission is legally untenable and a patently
erroneous finding that no fair-minded arbitrator could have
reached.
16. It has further been stated in the petition that the Impugned Award
warrants interference on two more counts. First, the learned AT’s
reliance on AAI granting relief to its own concessionaires to justify
relief for MIAL is patently illegal and has no contractual basis under
the OMDA. It has been stated that the learned AT ignored key evidence
that MIAL itself did not extend revenue share relief to its own
concessionaires at Mumbai Airport. Furthermore, AAI’s argument that
MIAL’s claim was not contractual but premised on public law grounds
beyond the jurisdiction was not even considered. The learned AT
erroneously equated MIAL, an airport operator, with small retail
concessionaires (such as cafés) at AAI-run airports, despite the
fundamental difference in their roles. It has been stated that MIAL
holds an exclusive right to operate Mumbai’s only airport, with its
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 12 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
primary financial obligation being the payment of the AF, whereas
AAI’s concessionaires operate individual shops without comparable
obligations. Notably, AAI never excused or suspended revenue share
payments for its own concessionaires, making the learned AT’s
conclusion factually and legally flawed. Additionally, it has been stated
the Impugned Award’s reasoning is extra-contractual, relying on
AAI’s treatment of other agreements rather than the specific terms of
the OMDA, rendering it liable for setting aside under Section 34(2)(A)
of the Act. It has also been stated that the learned AT wrongly claimed
that AAI ignored the term “excuse,” despite AAI’s written submissions
addressing this distinction extensively. Furthermore, the finding that
the contract would have become void “but for” the Force Majeure
clause is entirely unsupported by evidence and overlooks the necessity
of proving an actual inability to perform.
(C) SUBMISSIONS ON BEHALF OF THE PETITIONER:
17. Sh. Tushar Mehta, learned Solicitor General of India submitted that the
impugned award is liable to be set aside as it is perverse, contrary to
law, and fundamentally alters the contractual framework between the
parties. It was submitted that an arbitral Award is liable to be set aside,
if the arbitrator construes the contract in a manner that no fair-minded
or reasonable person would, and the arbitrator’s view is not even a
possible view, or if the award wanders outside the contract. It has been
submitted that the contract, which is the culmination of the parties’
agency, is to be given full effect, and no provision thereof can be
frustrated or rendered otiose. It has been submitted that an arbitral
award can also be set aside if the award is (i) unreasoned, in
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 13 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
contravention of Section 31(3) of the Act; (ii) perverse and, hence,
patently illegal; (iii) contrary to the fundamental policy of Indian law,
inter alia for the reason that it disregards judgments/orders passed by
superior courts. Reliance has been placed on Ssangyong Engg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131to emphasize that
if an arbitrator gives no reason for an award, it contravenes Section
31(3) of the 1996 Act that would certainly amount to patent illegality
on the face of the award. It was submitted that though perversity may
no longer be a ground for challenge ―under public policy of India‖ it
would certainly amount to patent illegality appearing on the face of the
award.
18. Learned SG has also relied on the judgment in DMRC Ltd. v. Delhi
Airport Metro Express Pvt. Ltd., 2024 INSC 292 to emphasize that in
a similar case involving public funds, the Apex Court approved the
exercise of power under Section 34 to set aside an Award holding it to
be perverse and resulting in a miscarriage of justice, on the ground that
the Tribunal adopted an ―unreasonable‖ and ―uncalled for
interpretation‖ of the contract which frustrated the relevant contractual
provision(s). Learned SG submitted that in DMRC Ltd. v. Delhi
Airport Metro Express Pvt. Ltd.,(Supra) reliance was placed upon
Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (Supra) wherein
it was inter alia held that though construction of the terms of a contract
is primarily for an arbitrator to decide. However, if the arbitrator
construed a contract in a manner that no fair minded or reasonable
person would or that the arbitrator’s view is not even a possible view to
take or if the arbitrator wanders outside the contract and deals with the
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 14 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
matter not allotted to him, the arbitrator commits an error of
jurisdiction. Learned SG submitted that this ground of challenge now
falls within the new ground added under Section 34(2)(A) of the Act. It
was submitted that a finding based on no evidence at all or an award
which ignores vital evidence in arriving at its decision would be
―perverse‖ and liable to be set aside on the ground of ―Patent
Illegality‖.
19. Learned SG has also relied upon Energy Watchdog v. CERC, (2017)
14 SCC 80 in which reliance was placed upon Alopi Parshad & Sons
Ltd. v. Union of India, (1960) 2 SCR 793 : AIR 1960 SC 588 wherein
it was inter alia held that the performance of a contract is never
discharged merely because it may become onerous to one of the
parties. In Energy Watchdog (Supra) reliance was also placed upon
Naihati Jute Mills Ltd. v. Khyaliram Jagannath, (1968) 1 SCR 821:
AIR 1968 SC 522, wherein it was inter alia held that a contract is not
frustrated merely because the circumstances in which it was made are
altered. It was further inter alia held that the courts have no general
power to absolve a party from the performance of its part of the
contract merely because its performance has become onerous on
account of an unforeseen turn of events.
20. Similarly, in Energy Watchdog (Supra) reliance was also placed upon
Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH (1961) 2 WLR 633
wherein the House of Lords inter alia held that even though the
contract had become more onerous to perform, it was not
fundamentally altered. It was further inter alia held that where
performance is otherwise possible, a mere rise in freight price wouldSignature Not Verified
O.M.P. (COMM) 185/2024 Page 15 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
not allow one of the parties to say that the contract was discharged by
impossibility of performance.
21. Learned SG has also placed reliance upon NTPC Limited v Jindal ITF
Limited & Anr.2025 SCC OnLine Del 511 wherein it was inter alia
held that despite the minimum judicial interference, the Court would
not mechanically uphold the award of the learned AT without
examining the same on the anvil of the settled judicial principles and
principles of natural jurisdiction. In this case, it was inter alia held that
the legislature may have circumscribed the jurisdiction of the Court but
still it has bestowed a duty upon the Court to examine the same within
a limited sphere
22. Learned SG has submitted that the Force Majeure clause in the OMDA,
i.e., Chapter XVI is a self-contained code governing ‗Force Majeure’
which provides conditions that must be satisfied for an event to qualify
as an event of ‗Force Majeure’ within the meaning of the OMDA for
the benefit of suspension/excusal to be availed. Learned SG has taken
this court through the Scheme of Chapter XVI of the OMDA and
submitted that Article 16 of the OMDA requires that the party claiming
the benefit of the Force Majeure provision can seek suspension/excusal
of the relevant contractual obligation ―to the extent that‖ it is ―unable to
render such performance‖. It was submitted that in any case ―Force
Majeure‖ is not an admitted position, while the pandemic is covered as
one of the physical events set out in Clause 16.1.3, however, as per the
same clause, it is evident that the pandemic would qualify as Force
Majeure only ―to the extent that they, or their consequences satisfy the
requirements set forth in Article 16.1.1 and Article 16.1.2‖, i.e.,Signature Not Verified
O.M.P. (COMM) 185/2024 Page 16 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
inability is a sine qua non for an event described in Article 16.1.3 to
constitute ―Force Majeure‖ under the OMDA and thereby avail the
benefit of Chapter XVI.
23. Learned SG has submitted that in the present case, MIAL has not been
able to prove that it was ―unable‖ to pay the AF from 13.03.2020
onwards. It has been submitted that MIAL was undisputedly able to
(and in fact did) render performance of all its obligations under the
OMDA, including the obligation to share 38.7% of its revenue with
AAI. It has been submitted that from 13.03.2020 to 28.02.2022, MIAL
substantially paid AAI its share of revenue or kept AAI’s share aside
throughout the relevant period. It has been submitted that on July 7,
2020 where MIAL transferred INR 29.07 crores from the Proceeds
Account to the AAI Fee Account as payment for the Monthly Annual
Fee (‗MAF’) for July 2020. Shortly, thereafter on July 9, 2020, MIAL
filed an application under Section 9 of the Arbitration Act seeking to
restrain further transfers from the Proceeds Account to the AAI Fee
Account. On July 15, 2020, the learned Single Judge of this court
directed that the ―money in the Escrow Account‖ remain in status quo
until the conclusion of arguments the following day, a directive that
remained in place until November 27, 2020. Later, on January 14,
2021, the Division Bench of this Court ordered MIAL to maintain a
balance of INR 153 crores in a separate interest-bearing account with
SBI to secure AAI’s claims regarding pending AF for the period
between April and November 2020. Finally, on March 11, 2021, MIAL
wrote to AAI, acknowledging that the Force Majeure event had ceased.
Notably, it has been submitted that this letter was issued just two days
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 17 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
before the expiration of the one-year period stipulated in Article 16.1.7
of the OMDA, upon which AAI would have been entitled to terminate
the OMDA.
24. Learned SG has submitted that despite being able to pay the Annual
Fee, MIAL, in its Statement of Claim, sought excusal from payment of
the Annual Fee from March 13, 2020, ―till such time period the
Claimant achieves the level of activity prevailing before occurrence of
Force Majeure.‖ Additionally, MIAL sought an extension of the Term
of the OMDA for a commensurating period. Significantly, these reliefs
were sought without a single pleading in the Statement of Claim
asserting that MIAL was ―unable‖ to pay the Annual Fee, as required
under Chapter XVI of the OMDA.
25. Learned SG has submitted that even in its Reply, MIAL itself candidly
admitted that it had been ―constantly making‖ payments of the Annual
Fee. MIAL contended that it was not required to demonstrate such
inability to claim the benefit of Chapter XVI–an argument that
directly contradicts the requirement under Article 16.1.1 to demonstrate
an inability to perform the obligation in question. Learned SG
emphasized that when a party has in fact been able to perform its
obligations, it cannot claim an inability to do so or seek an excuse from
performance.
26. Learned SG further submitted that on March 17, 2020, MIAL had
invoked the Force Majeure clause seeking ‗suspension’ and not
‗excusal’ of payment of the Annual Fee with effect from March 13,
2020. However, it has been submitted that MIAL’s notice neither stated
nor demonstrated that it was ―unable‖ to fulfill this obligation, thereby
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 18 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
failing to comply with the requirements of Article 16.1.5(a), which
mandates that a notice must include details regarding the ―manner in
which the Force Majeure event(s) affect the Party’s obligation(s).‖
Additionally, it has been submitted that Learned AT erroneously
granted MIAL excusal from obligations arising after March 11, 2021,
the date on which MIAL itself acknowledged that the Force Majeure
event had ceased. Thus, it has been submitted that since necessary
preconditions under Chapter XVI of the OMDA were not satisfied, and
therefore, MIAL was not entitled to any relief under the Force Majeure
provisions.
27. Learned SG submitted that in addition, the Impugned Award not only
holds that MIAL is excused from making any payment of the Annual
Fee to AAI during the period 13.03.2020 to 28.02.2022, but it also
holds that MIAL is entitled to an extension of the very Term of the
OMDA for a commensurating period, despite the fact that, no clause in
the OMDA, including the Force Majeure clause, contemplates such
relief and, further that no such relief was sought at the relevant time by
MIAL while purportedly invoking Article 16 of the OMDA. It has been
submitted that MIAL has been granted a ―double dip‖ of both excusal
of its obligation to pay the Annual Fee and also an extension of the
term of the OMDA and has been unjustly enriched at the cost of public
monies.
28. Learned SG submitted that the learned AT has rewritten the Contract
between the parties and rendered otiose certain key provisions thereof.
It has been submitted that MIAL’s case was that Article 16 of the
OMDA provided for suspension/excusal of MIAL’s obligation to pay
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 19 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
the Annual Fee to AAI under Article 11 in the event the revenues
received by MIAL during the corresponding period were insufficient to
operate and manage the Airport. It has been submitted that nothing in
the language of either Article 16 or Article 11 contains such a
stipulation. It has been submitted that without explicitly giving
expression to the term it was implying in the OMDA, the learned AT at
para 105 concludes that during the so-called force majeure period,
revenue receipts would have to be used ―firstly for running the Airport,
and in the event that there is a surplus thereafter, the surplus would
have to be share‖. It has been submitted that this stipulation finds no
place in the OMDA, but has been written into the contract by the
Award.
29. Learned SG has submitted that an essential contractual precondition,
i.e., that a party must be unable to perform a particular contractual
obligation in order to claim the benefit of the force majeure provision,
has been written out of existence by the Tribunal. It has been submitted
that since MIAL actually paid/kept aside the Annual Fee, MIAL cannot
possibly be said to be ―unable‖ to perform its obligation under Chapter
XI of the OMDA. Therefore, the decision to order a refund of amounts
paid over by MIAL to AAI is a patently illegal conclusion.
30. Learned SG has submitted that learned AT has also inserted a provision
on extension of the term of the OMDA. It has been submitted that no
provision of the contract, either in Chapter XVI or XVIII or otherwise,
contemplates the extension of the Term of the OMDA on account of
force majeure events. It has been submitted that in its letter dated
March 17, 2020, MIAL did not seek such an extension, and during the
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 20 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
arbitration proceedings, in the course of its oral submission, MIAL
expressly admitted that there was no contractual basis for this relief,
instead relied on the principles of ―economic justice‖ for seeking the
relief of such extension. It has been submitted that the Impugned
Award does not examine or address these fundamental arguments, nor
does it engage with the admission. It has been submitted that Ld. AT
ignored the AAI’s explicit contention that ―the Claimant candidly
admitted in the course of its submissions that there was no contractual
basis for the aforesaid claim and that it relied on the principles of
‗economic justice’,‖ a position that MIAL has never denied. It has
further been submitted that the learned AT summarily granted the relief
of extension in a single paragraph, without substantive reasoning or
contractual justification, thereby effectively rewriting the contract by
altering the Term of the OMDA (Chapter XVIII), expanding the relief
under the force majeure clause beyond what is permitted (Chapter
XVI) and changing the basis on which bids were invited. It has been
submitted that the learned AT erroneously inserted a provision for
extension that does not exist in the contract.
31. Learned SG has submitted that learned AT’s justification, as set out in
paragraph 117 of the Impugned Award, is legally unsustainable and
unreasoned, as it asserts that ―in several contracts where the tenure
spans a long term, alleviation/relief is accommodated by extending the
tenure of the contract‖ without citing any legal authority, contractual
provision, or factual basis. It has been submitted that learned AT
misinterprets Article 16.1.5(c), which does not contemplate an
extension of the Term and misconstrues AAI’s letter dated March 30,
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 21 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
2020, which merely indicated AAI’s willingness to extend the time for
performance of an obligation (i.e., payment of the Monthly Annual
Fee), not the Term of the OMDA itself. It has been submitted that the
extension of the Term effectively grants MIAL an undue advantage by
allowing it to benefit from the Force Majeure clause twice–first,
through the excusal of the Annual Fee payments from March 13, 2020,
to February 28, 2022, and second, by obtaining an approximately two-
year extension of the contract–resulting in an unjust financial benefit
for MIAL at the expense of public revenue.
32. Learned SG has submitted that learned AT has converted the OMDA
into a Profit-Sharing Contract. It has been submitted that under the
OMDA, MIAL shares 38.7% of its Revenue with AAI, and the said
obligation to pay the Annual Fee is not contingent on MIAL being able
to meet its operational costs or establishing that MIAL is encountering
negative cash flow. It has been submitted that at paragraph 105 of the
Award, the learned AT has converted the revenue-sharing mechanism
contemplated under the OMDA into a profit-sharing contract by
holding that, during the force majeure period, ―the revenue
receipts/collections would have to be used firstly for running the
Airport, and only in the event that there is a surplus thereafter, the
surplus would have to be shared…‖ Learned SG has submitted that this
finding rewrites the OMDA and also has an effect of rewriting the
Priority Cash-flow Application provided in clause 3.2(B) of the Escrow
Account Agreement, wherein payment of AAI Fee is given precedence
over meeting of MIAL’s operational and other expenditure.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 22 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
33. Learned SG submitted that the Impugned Award is unreasoned and
perverse on multiple key issues. At paragraph 31, learned AT stated
that the transpiration of a force majeure event is beyond cavil or
disputation, thereby rendering otiose any notice as envisaged in Article
16.1.5 of the OMDA. It has been submitted that this observation by the
learned AT effectively negates the contractual requirement of
demonstrating an inability to perform obligations before invoking
Force Majeure, thereby bypassing a fundamental prerequisite under the
contract. It has been submitted that the learned AT fails to undertake
any analysis of whether MIAL was actually unable to pay the Annual
Fee which is a critical issue for determining the validity of its claim
under Chapter XVI of the OMDA. Further, it has been submitted that at
paragraph 93, the Tribunal holds that it was unnecessary for it to return
an opinion on the question whether OMDA envisions either revenue
sharing or profit sharing, despite AAI specifically arguing that
acceptance of MIAL’s claims would fundamentally alter the
contractual framework. Learned SG has submitted that this failure to
engage with AAI’s argument undermines the reasoning of the Award.
Additionally, it has been submitted that the Award is plainly perverse
and internally contradictory as at paragraph 65, the learned AT
recorded that MIAL conceded that all conditions under Article 16.1.2
must be satisfied in order to claim relief under Chapter XVI, yet at
paragraph 67, it has been stated that MIAL argued that Chapter XVI
does not require proof of inability to pay. Learned SG has submitted
that this contradiction further underscores the perverse nature of the
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 23 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Award, as it fails to provide a consistent and reasoned approach to the
interpretation of the contractual provisions.
34. Learned SG has submitted that the impugned award is contrary to the
public policy. It has been submitted that at paragraph 83, the learned
AT held that Section 32 of the Indian Contract Act would only be
attracted if the contingency of the outbreak of COVID or any other
closely similar contagion had specifically been postulated and dealt
with in the contract. However, it has been submitted that this statement
disregards the binding effect of Energy Watchdog v. CERC, (2017) 14
SCC 80, which clearly holds that Section 32 of the Indian Contract Act
applies when a contract contains a force majeure clause, whereas
Section 56 applies when there is no such provision.
35. Learned SG has submitted that the fact that MIAL’s revenues are said
to have dropped during the relevant period is not sufficient to avail the
benefit of Chapter XVI. To avail the benefit of Chapter XVI, all
conditions of Article 16.1.2 have to be satisfied. This is evident from
the plain language of Article 16.1.2 as has also been held in the
Impugned Award. This is also in accord with Article 16.1.3 which
specifies that a physical event (such as the pandemic in the present)
only constitutes ―Force Majeure‖ if it also satisfies the requirements of
Articles 16.1.1 and 16.1.2. Learned SG has submitted that the alleged
temporary negative cash flow of MIAL only satisfies the requirement
of Article 16.1.2(a) but not the requirement of Article 16.1.2(e) and
Article 16.1.1, i.e., the requirement to prove inability. It has been
submitted notwithstanding above and assuming that MIAL suffered a
temporary negative cash flow and that such temporary negative cash
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 24 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
flow ―materially and adversely affects the performance of an
obligation‖, even in that case this in itself is not sufficient to claim the
benefit of Chapter XVI without MIAL also proving that it was ―unable
to render such performance by an event of Force Majeure‖. In view of
the decision of Supreme Court in Energy Watchdog v. CERC, (2017)
14 SCC 80, it has been submitted that a party is not discharged from its
contractual obligations even if performance of the same has become
more onerous. It has been submitted that it is not sufficient for MIAL
to say that if its revenues drop, the provisions of Chapter XVI
automatically trigger. The test is inability or impossibility to perform
the obligation, i.e., inability to pay AAI its share of the Revenue and as
stated previously, it has been submitted that this test is not satisfied,
and, on the contrary, MIAL has in fact discharged its obligation by
keeping aside / paying over AAI’s share of Revenue while continuing
to operate and maintain the Mumbai Airport. Thus, it has been
submitted that the Impugned Award has substituted the contract
between the parties with one of its own making inter alia by writing
Clauses 16.1.1 and 16.1.2(e) out of existence, in an attempt to provide
some basis for the grant of relief to MIAL.
36. Learned SG has submitted that the grant of relief until 28.02.2022 is
unreasoned. It has been submitted that MIAL’s reliance on Article
16.1.5(c) of the OMDA is misplaced and contrary to the meaning of the
said provision. It has been submitted that a bare perusal of Article
16.1.5(c) makes it clear that the provision allows for the ―The time for
performance‖ to be ―extended by the period during which such Force
Majeure continues and by such additional period thereafter as is
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 25 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
necessary to enable the affected Party to achieve the level of activity
prevailing before the event of Force Majeure.‖ Therefore, Article
16.1.5(c) only provides for the period that a suspension could operate.
Such a stipulation, it has been submitted, is not relevant to a
whatsoever to ―excusal‖ (which is the relief that has been granted in the
Impugned Award). If an obligation has been excused, there is no
question of extending the time for performance of the same. Further,
learned SG has submitted that without prejudice to the above, and
assuming (without conceding) the said Article has any relevance in this
context, it has been submitted that Article 16.1.5(c) only allows for a
time extension to perform those obligations that were affected during
force majeure. It does not wipe out contractual obligations that arose
for the very first time after the period of force majeure ceased to exist.
It has been submitted that even according to MIAL itself, the force
majeure event ceased on 11.03.2021, thus, no obligation that arose after
11.03.2021 could have been suspended by having recourse to Article
16.1.5(c). Be that as it may, it has been submitted that the learned AT
has erred in not determining what is the ―additional period thereafter as
is necessary to enable the affected Party to achieve the level of activity
prevailing before the event of Force Majeure‖. It has beens submitted
that the sole basis on which MIAL has been granted relief till
28.02.2022 is the Supreme Court’s Order extending limitation.
However, it has been submitted that MIAL did not even attempt to
justify this reasoning or even suggest that the Order of the Supreme
Court extending the statutory period of limitation under several laws
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 26 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
has any relevance to the purely contractual issue of relief being claimed
under a Force Majeure clause.
37. Learned SG has submitted that the Supreme Court’s Order extending
limitation has nothing to do with contractual force majeure generally or
specifically under OMDA. It has submitted that the same has no
relevance to the conditions stipulated in Chapter XVI which an affected
party must satisfy in order to claim relief under the said Chapter.
Therefore, it has been submitted that the Award is clearly based on
guesswork and irrelevant considerations, which contradict the clear and
unambiguous terms of the contract.
38. Learned SG has submitted that the submission of MIAL that Article
16.1.5(c) also provides for extension of the Term of the OMDA is
incorrect and contrary to the plain language of the contract. It has been
submitted that Article 16.1.5(c) only allows for the time for
performance of an obligation affected by force majeure to be extended
for a specified period within the Term. It does not allow a party to
extend the Term of the Contract itself. It has been submitted that
Article 16.1.5(c) only entails the ―Procedure for Force Majeure‖ and
only defines the period of suspension of performance of an obligation
affected by Force Majeure under Article 16.1.1 and has no application
to the enjoyment of rights granted to MIAL under the OMDA. If it
were the intention of the parties that the force majeure clause would
operate to extend the Term of the OMDA, the contract would have said
as much. It conspicuously does not do so. It has been submitted that
Article 16.1.5(c) does not provide a basis for claiming a relief over and
above those contemplated under Article 16.1.1, namely suspension or
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 27 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
excuse of MIAL’s obligations under the OMDA. In any case, it has
submitted that MIAL’s submission that Article 16.1.5(c) permits the
extension of ―any right affected‖ by Force Majeure and therefore the
Grant itself is to be extended cannot be accepted for the simple reason
that no such reasoning exists in the Award. It has been submitted that
the fact that MIAL is relying on reasoning that forms no part of the
Award to support the conclusions arrived at therein is sufficient proof
that the Award is incapable of being defended. Therefore, it has been
submitted that the Tribunal has granted reliefs that find no mention in
Chapter XVI or anywhere else in the contract, thereby impermissibly
rewriting the very Term of the OMDA under Article 18.1(e).
39. Learned SG has submitted that MIAL’s reliance on the Email dated
30.03.2020 to contend that occurrence of force majeure was an
admitted position between the parties is misplaced. It has been
submitted that the email dated 30.03.2020 sent by AAI to the Escrow
Bank has been written in terms of Paragraph 12 of the Letter dated
30.03.2020 issued by AAI to MIAL. It has been submitted that MIAL
purportedly invoked force majeure on 17.03.2020 which was disputed
by AAI vide letter dated 30.03.2020 which was specifically issued
under Article 16.1.5(d) of the OMDA and specifically stated that AAI
did not agree with the assertion of MIAL that no Annual Fee is to be
paid due to suspension of obligations of MIAL on account of Force
Majeure event. Therefore, it has been submitted that it is clear that AAI
has never admitted to the occurrence of force majeure. However, on a
without prejudice basis, it has been submitted that AAI offered a three
month deferral to MIAL keeping in view MIAL’s stated difficulty in
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 28 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
preparing its Business Plan for the Financial Year (which forms the
basis of the computation and payment of Annual Fee for the Year and
is ordinarily submitted at the beginning of the Financial Year) in view
of Covid-19 related restrictions on movement. It has been submitted
that AAI also in the said letter informed MIAL that it shall issue
necessary instructions State Bank of India which were issued vide
subsequent Email dated 30.03.2020 that has been relied upon by
MIAL. Therefore, it is has been submitted that it is beyond the pale of
doubt that AAI had always disputed the existence of force majeure
from the very beginning and duly followed the procedure under the
contract for disputing such force majeure notices.
(D) SUBMISSION ON BEHALF OF THE MIAL:
40. Per Contra, Sh. Rajiv Nayar, learned senior counsel for MIAL has
submitted that the learned AT has rendered the award based on a
thorough appreciation of evidence. It has been submitted that the
grounds for challenging an arbitral award under Section 34 of the Act
are well settled, and the scope of challenge is extremely limited.
Reliance has been placed on Associate Builders v. Delhi Development
Authority, (2015) 3 SCC 49; SsangYong Engineering and
Construction Company Limited v. NHAI, (2019) 15 SCC 131.
41. Learned Senior Counsel submitted that, while exercising jurisdiction
under Section 34 of the Act, courts should refrain from interfering with
an arbitral award merely due to an erroneous application of law or by
re-appreciating evidence. It has been submitted that the court does not
sit in appeal over the arbitral award, and its interference does not entail
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 29 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
a review of the merits of the dispute. Moreover, it has been submitted
that only an arbitrator’s view which is impossible can be interfered with
by courts, whereas a possible view taken on facts must be respected.
Reliance has been placed on MMTC Limited v. Vedanta Limited,
(2019) 4 SCC 163; Konkan Railway Corporation Ltd. v. Chenab
Bridge Project, (2023) 9 SCC 85; and OPG Power Generation (P)
Ltd. v. Enexio Power Cooling Solutions India (P) Ltd., 2024 SCC
OnLine SC 2600.
42. Learned Senior Counsel submitted that courts should not interfere with
an award merely because an alternative view on facts and interpretation
of contract is possible. It has been submitted that if the arbitrator’s
interpretation is plausible, it cannot be subjected to judicial review,
even if the contract is capable of two interpretations. It has been
submitted that the courts under Section 34 cannot substitute its own
view in place of the interpretation accepted by learned AT. Further,
even if an arbitral tribunal commits an error in the construction of the
contract, such an error falls within its jurisdiction and cannot be a
ground for challenge under Section 34. The Court cannot act as an
appellate forum over the findings of the tribunal. Reliance has been
placed on Kwality Manufacturing Corporation v. Central
Warehousing Corporation, (2009) 5 SCC 142; Pure Helium India (P)
Limited v. Oil & Natural Gas Commission, (2003) 8 SCC 593; and
Rashtriya Ispat Nigam Limited v. Dewan Chand Ram Saran, (2012) 5
SCC 306.
43. Learned Senior Counsel submitted that in the present case, none of the
grounds for challenge under Section 34 are available to AAI as all
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 30 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
critical facts, events, and evidence are undisputed. It has been
submitted that the Learned AT’s interpretation of Chapter XVI of the
OMDA, the primary clause under consideration, is both plausible and
well-reasoned, having been arrived at after appreciating the evidence
on record. It has further been submitted that AAI, in the present
petition, has merely reiterated its previous arguments, which have
already been duly addressed by the learned AT.
44. Learned Senior Counsel, in respect of the objection of AAI that the
interpretation of the OMDA by the Learned AT is erroneous, has
submitted that the Learned AT correctly interpreted the clause in
question by considering all its terms. It has been submitted that
Learned AT rightly rejected AAI’s interpretation, which rendered the
word “excuse” otiose and introduced terms like “deferral” that were not
present in the clause.
45. Learned Senior Counsel submitted that AAI has not challenged the
factual findings of the learned AT. It is an admitted position that
COVID-19 is a force majeure event and that a decrease in ATM and
PTM adversely affected MIAL’s ability to generate revenue due to the
outbreak of COVID-19 which significantly impacted MIAL’s
capability to operate the airport, leading to expenses exceeding
receipts. Despite this, it has been submitted that MIAL was required to
continue airport operations due to its legal obligations under OMDA.
46. Learned Senior Counsel submitted that AAI itself, in its Annual Report
for FY 2020-2021, admitted the severe impact of COVID-19 on the
aviation sector. It has been submitted that there is essentially no dispute
on facts, and since AAI has not challenged the factual findings, they
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 31 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
have attained finality. Nonetheless, it has been submitted that findings
of such nature cannot be challenged within the limited jurisdiction
available under Section 34.
47. Learned Senior Counsel submitted that the Learned AT’s findings on
the interpretation of Articles 16.1.1, 16.1.2, and 16.1.5 of the OMDA
are correct, reasonable, and based on the evidence and material before
it. It has been submitted that COVID-19 was undeniably a force
majeure event, as acknowledged by both AAI and the Government of
India. Moreover, it has been asserted that AAI itself granted relief to its
concessionaires due to COVID-19, which the Learned AT deemed an
admission of the occurrence of a force majeure event. Additionally, it
has been submitted that MIAL’s financial statements indicated that its
total revenue from airport operations was insufficient to meet its
operational expenses, thereby demonstrating its inability to discharge
its obligations under OMDA. It has been submitted that these financial
statements were neither challenged nor questioned by AAI during
cross-examination and despite the drastic reduction in aircraft and
passenger movement due to various government notifications and
circulars restricting air travel, MIAL was legally obligated to incur all
costs associated with the maintenance and operation of the airport. It
has been submitted that AAI’s contention that MIAL’s continued
payment of the Annual Fee negates its claim of ―inability‖ is
misplaced. It has been submitted that these payments were made
pursuant to the Order dated December 22, 2021, which was based on a
Joint Application dated December 13, 2021, explicitly stating that the
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 32 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
payments were made without prejudice as a purely interim
arrangement.
48. Learned Senior Counsel in respect of the AAI’s argument that the
Learned AT has rewritten the OMDA and Escrow Agreement has
submitted that the same is misplaced and unfounded. It has been
submitted that the award does not alter the OMDA but rather applies
the force majeure clause as per the contract. Further, it has also been
submitted that AAI’s submission that relief of extension of the term of
OMDA amounts to rewriting the contract is erroneous as the Learned
AT has rightly relied on Article 16.1.5(c) of the OMDA, which
provides a contractual basis for granting the relief of extension. It has
been submitted that the Learned AT rightly held that the necessary
consequence of a force majeure event was a corresponding extension of
OMDA for such a period as the learned AT recognized the force
majeure conditions to have existed.
49. Learned Senior Counsel in respect of the AAI’s contention that the
email dated 30.03.2020 by AAI to the Escrow Bank did not constitute
an admission of force majeure, has submitted that the same is incorrect
and an afterthought. It has been submitted that the said email explicitly
recorded AAI’s acknowledgment that COVID-19 constituted a force
majeure event and deferred the Monthly Annual Fee payments on that
basis. Furthermore, it has been submitted that AAI, having chosen not
to lead a fact witness before the learned AT to explain away its
admission, cannot now dispute the force majeure claim. In light of the
foregoing, Learned Senior Counsel has submitted that the challenge
under Section 34 is wholly without merit and deserves to be rejected.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 33 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
(E) FINDING AND ANALYSIS:
50. It is a settled proposition that the Arbitration and Conciliation Act,
1963, as amended up to date, prescribes minimum judicial interference.
The Court can interfere under Section 34 of the Act on the limited
grounds provided therein. The award can only be interfered with if the
Court reaches to the conclusion that the perversity of the award goes to
the root of the matter and there is no possibility of alternative
interpretation which may sustain the arbitral award. It is no longer res
integra that the Court while exercising the jurisdiction under Section
34 cannot clothe itself with an appellate jurisdiction. The Court is
bound to respect the finality of the arbitral award. The Act mandates
party autonomy to get their dispute adjudicated by an alternative forum
as provided under the law. The approach of interfering into the award
without there being any ground as prescribed under Section 34 would
actually frustrate the commercial wisdom behind opting for alternate
dispute resolution. It is also pertinent to mention here that the Court
cannot interfere into the award merely on the ground that an alternative
view is possible on the facts and interpretations of contract. It is also a
settled proposition that the Court should respect the view taken by the
Arbitral Tribunal even if the reasoning provided in the award is
implied. The award can only be interfered if it portrays perversity,
unpardonable under Section 34 of the Act. Reliance can be placed upon
Dyna Technologies Vs. Crompton Greaves Limited (2019) 20 SCC 1.
51. In Dyna Technologies Vs. Crompton Greaves Limited(Supra), it was
inter alia held that while considering the requirement of a reasoned
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 34 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
order, three characteristics of a reasoned order can be fathomed i.e.;
that the order is (i) proper, (ii) intelligible and (iii) adequate. It was
further inter alia held that if the reasonings in the order are improper,
they reveal a flaw in the decision making process. The award is also
open to challenge on the ground of impropriety or perversity in the
reasoning. Similarly, if the award is based on no reasoning at all that
would be termed as unintelligible. However, if there is a challenge on
adequacy of reasons it was inter alia held in Dyna Technologies Vs.
Crompton Greaves Limited(Supra), that the Court while exercising
jurisdiction under Section 34 has to adjudicate the validity of such an
award based on the degree of particularity of reasoning required having
regard to the nature of issues falling for consideration. It was further
inter alia held that the degree of particularity cannot be stated in a
precise manner as the same would depend on the complexity of the
issue. The Apex Court inter alia held that even if the Court comes to a
conclusion that there were gaps in the reasoning for the conclusions
reached by the tribunal, the Court needs to have regard to the
documents submitted by the parties and the contentions raised before
the tribunal so that the awards with adequate reasons are not set aside
in a casual and cavalier manner. Thus, it was held that the Courts have
to be very careful while distinguishing between inadequacy of reasons
in an award and unintelligible awards.
52. Bare perusal of this makes it clear that if the award provides no
reasoning at all then it falls in the category of unintelligible. Even
otherwise it would be hit by Section 31(3) of the Act which provides
that the arbitral award must state the reasons upon which the award is
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 35 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
based except for the reasons given in the provision itself. It is also
pertinent to mention here that the Arbitration and Conciliation Act,
1996 does not provide any qualification for being appointed as an
arbitrator. In this regard, Section 11(1) only provides that a person of
any nationality may be an arbitrator unless agreed by the parties. Thus,
it is not necessary that an arbitrator would be a person from a legal
background. Possibly for this reason, the legislature in its wisdom
under Section 31(3) of the Act has provided that generally the arbitrator
shall state reasons upon which it is based. However, a liberty was given
to the parties that they may agree that in the award no reasons are to be
given. The award may also not provide any reasons, if the parties have
reached on a settlement as provided under Section 30 of the Act. Thus,
it seems that for this reason the Apex Court has inter alia held that
while entertaining the challenges of an award on the ground of
inadequacy of reason the Courts may also consider the documents
submitted by the parties and contentions raised before the tribunal.
Thus, the Courts while exercising its jurisdiction under Section 34 of
the Act may not only look into the award but also look at the pleadings,
documents and submissions made by the parties.
53. The Court, in exercising its jurisdiction under Section 34 of the Act to
set aside an award, must determine whether the award is so irrational
that no reasonable person could have reached the same conclusion. An
arbitral award shall fall into the aforesaid category if the findings are
based on no evidence; or an Arbitral Tribunal has taken into account
something irrelevant to the decision or ignores vital evidence in
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 36 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
arriving at its decision. Reliance can be placed upon Associate Builders
v. DDA, (2015) 3 SCC 49.
54. In Excise And Taxation Officer-cum-Assessing Authority v. Gopi
Nath & Sons 1992 Supp (2) SCC 312 it was inter alia held that if a
finding of fact is arrived at by ignoring or excluding relevant material
or by taking into consideration irrelevant material or if the finding so
outrageously defies logic as to suffer from the vice of irrationality
incurring the blame of being perverse, then, the finding is rendered
infirm in law. Similarly, in Kuldeep Singh v. Commr. Of Police (1999)
2 SCC 10 it was inter alia held that if a decision is arrived at on no
evidence or evidence which is thoroughly unreliable that no reasonable
person would act upon it, the order would be perverse. However, if
there is some evidence on record which is acceptable and which could
be relied upon, howsoever compendious it may be, the conclusions
would not be treated as perverse and the findings would not be
interfered with.
55. In Rashtriya Ispat Nigam Limited vs Dewan Chandram Saran
(Supra) wherein it was inter-alia held that if the terms of a contract are
capable of two interpretations and the view taken by the arbitrator is a
possible if not a plausible one then it is not possible to say that the
arbitrator had travelled outside his jurisdiction, or that the view taken
by him was against the terms of contract. Reliance can also be placed
upon SAIL v. Gupta Brother Steel Tubes Ltd. [(2009) 10 SCC 63]. In
Sumitomo Heavy Industries Ltd. v. ONGC Ltd.[(2010) 11 SCC 296]
it was inter alia held that if the umpire has considered the fact, situation
and placed a construction on the clauses of the agreement which
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 37 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
according to him was the correct one, one may at the highest say that
one would have preferred another construction, but that cannot make
the award in any way perverse. It was further inter alia held that in such
a situation, the Court cannot substitute its own view in place of the
view taken by the arbitrator as it would amount to sitting in appeal.
56. In Kwality Mfg. Corpn. v. Central Warehousing Corpn.[(2009) 5 SCC
142] it was inter alia held that if the umpire is legitimately entitled to
take the view, which he holds to be the correct one after considering
the material before him and after interpreting the provisions of the
agreement, the same has to be accepted as final and binding.
57. The Court while deciding the petition under Section 34 of the Act and
particularly in the dispute arising out of the commercial contract must
bear in mind that the parties while entering into the contract,
voluntarily agreed to refer their matter for adjudication by an
adjudicator chosen and appointed by them. The parties at that stage
themselves have excluded their option of going to the Court of Law.
The basis genesis of the arbitration, particularly in the commercial
dispute is that the arbitrator while deciding such dispute may not clothe
himself with a very technical mindset and should decide the dispute
between the parties taking in view the commercial sense and the
business efficacy.
58. In Mumbai Metropolitan Region Development Authority v. Unity
Infraprojects Ltd., 2008 SCC OnLine Bom 190 it was inter-alia held
that a business like interpretation of contractual provisions must be
adopted in construing contracts entered into by persons of business to
govern business dealings. It was further inter alia held that the Court
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 38 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
must ensure that interpretation of law in commercial cases must not be
disjointed from the intent and object which those having business
dealings seek to sub-serve. It was noted that unless interpretation of
contracts effectuates a business meaning for persons of business, the
law will not fulfill its purpose and object of being a facilitator for
business and providing a structure of ordered certainty to those who
carry on business here. It is necessary to note that the judicial
dispensation system cannot remain static and has to be dynamic and
required to innovate constantly itself to keep abreast with rapid changes
in business terms.
59. In the present case, AAI which is a statutory authority established
under the Airport Authority of India Act, 1994 and the respondents
have entered into contract for commercial purposes. It cannot be
disputed that the intentions of both parties were to earn revenue out of
the joint venture. The joint venture herein was of the development and
maintenance of one of the most important and landmark airports of this
country, i.e., Mumbai. This Court is of the firm view that the state
cannot be denied the commercial gains of profits merely because it has
been termed as a welfare state and certain fundamental responsibilities
have been placed upon it under the various statutes and the Directive
Principles of State Policies. The state would also need the money and
the resources for running various welfare projects, and therefore in the
commercial disputes, the adjudicator has to maintain the balance
between the two. However, the adjudicator must take into account the
peculiar facts and circumstances of every case and must assess the
same in a very broad horizon. The issue in the present case is that
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 39 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
whether during the period of the pandemic, the general provisions of
the contract, which mandates the respondent to pay an annual fee at a
certain percentage will continue even during the pandemic. It cannot be
disputed that during the period of COVID-19, life had come to a
standstill. The case of the respondents are that though they continue to
run the operation but their revenues had fallen down so much that they
were unable to meet even the expenses. On the contrary the case of the
petitioner is that; firstly it cannot be said that the respondent were
―unable to pay‖ the fee as the MIAL had in fact substantially paid the
fee and thus, was in a position to pay the fee, secondly, the conditions
as provided in Article 16 of the OMDA regarding the force majeure
never existed in entirety. Learned AT agreed with the contentions of
the respondents and passed an award against the petitioner.
60. The question is whether the finding of the arbitrator in such a situation
can be considered to be perverse. It is a settled proposition that the
interpretation of the contract must be in sync with the test of business
efficacy and should be responsive to the facilitation of business. Any
interpretation which may generate any sense of uncertainty for the
parties, who choose arbitration as a mode of adjudication, should be
avoided.
61. In UHL Power Company Ltd. Vs. State of Himachal Pradesh(2022) 4
SCC 116 it was inter alia held that the law is not divorced from
business realities nor can the vision of the Judge who interprets the law
be disjointed from the modem necessities to make business sense to
business dealings. In UHL Power Company Ltd. (Supra) the Apex
Court while relying upon the Hudson’s elaboration in his seminal work
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 40 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
on Engineering Contracts inter alia held that the task of the Court is to
ascertain the objective and intention of the contract as evidenced by the
words used and not by the subjective intentions of the parties. It was
emphasized that the rule of evidence is that the whole of the contract
should be examined before construing an individual part.
62. Petitioner in the present case has heavily relied upon the finding of
Energy Watchdog (Supra) case to submit that a contract cannot be
discharged merely because the same has become onerous. However,
this Court considers that the findings in the Energy Watchdog (Supra)
are respectfully distinguishable to the facts and circumstances of the
case. In the present case, it is not the case of either of the parties that
performance of the contract had become onerous. It was never an
option for the MIAL to close down the operation of the airport. It is a
settled proposition that the force majeure clause will not generally be
invoked, if the contract provides for an alternative mode of
performance. Reliance can be placed upon Treitel on Frustration and
Force Majeure, 3rd Edition. The Court is of the considered view that ‗a
force majeure clause’ in a contract is generally an exception or an
eclipse provision, meaning thereby if a force majeure is enforced the
performance as mandated in the other terms of the contract will remain
eclipsed till the force majeure event persists. Whether the force majeure
has taken place or not or it exists or not or the time till when it exists is
a question of fact to be determined by the Arbitral Tribunal.
63. It is pertinent to mention here that there cannot be any dispute to the
proposition as laid down in NTPC Limited v Jindal ITF Limited &
Anr. (Supra).This Court is fully conscious of the fact that if the award
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 41 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
suffers from patent illegality, the Court can certainly interfere to avoid
the miscarriage of justice. However, whether the award suffers from
‗patent illegality’ is a matter of fact which varies from case to case and
has to be determined after taking into account the peculiar facts and
circumstances of the case. While deciding a petition under Section 34
of the Act, Courts cannot adopt the approach of one-size-fit-for-all.
Courts can interfere into the award only if it shocks the conscience of
the Court and is prone to adversely affect the administration of justice.
64. In Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan
Nigam Ltd. (2019) 7 SCC 236, the Apex Court after relying upon a
catena of judgments inter alia held that an Arbitral Tribunal must
decide in accordance with the terms of the contract, and if an Arbitrator
construes a term of the contract in a reasonable manner, it will not
mean that the award can be set aside. It was inter alia held that
construction of the terms of a contract is primarily for an Arbitrator to
decide and the award can be set aside if the Arbitrator construes the
contract in such a way that it could be said to be something that no fair-
minded or reasonable person could do. It was further inter alia
observed that when a court is applying the ‗public policy’ test to an
arbitration award, it does not act as a court of appeal and consequently
errors of fact cannot be corrected. It is pertinent to mention here that it
was inter alia held that a possible view by the Arbitrator on facts
necessarily has to pass muster as the Arbitrator is the ultimate master of
the quantity and quality of evidence to be relied upon when he delivers
his arbitral award. It is also inter alia held that an award based on little
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 42 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
evidence or on evidence which does not measure up in quality to a
trained legal mind would not be held to be invalid on this score.
65. Similarly, in Hindustan Construction Co. Ltd. Vs. NHAI (Supra), it
was inter alia held that by training, inclination and experience, Judges
tend to adopt a corrective lens; usually commended for appellate
review. However, it was this lens is unavailable when exercising
jurisdiction under Section 34 of the Act. The Apex Court inter alia held
that the Courts cannot, through process of primary contract
interpretation, create pathways to the kind of review which is forbidden
under Section 34. In State of U.P. v. Allied Constructions, (2003) 7
SCC 396 the Apex Court went to the extent of inter alia holding that in
case of a speaking award even if it is wrong either in law or in fact, it
cannot be interfered. The only requirement is that the arbitrator must
have assigned sufficient and cogent reasons in support thereof. It is
pertinent to mention here that while interpreting the contract the duty of
the adjudicator is to give efficacy to the contract rather than to
invalidate.
66. In the present case, the AAI has challenged the impugned award inter
alia on the ground that learned AT has fallen into error by inter alia
holding that the outbreak of Covid-19 pandemic is a force majeure
event and does not even call for consideration. As far as the happening
of the epidemic i.e. COVID-19 is concerned, that cannot be disputed.
The question is whether merely happening of the COVID-19 or anyone
epidemic within India is sufficient to invoke force majeure. In this
regard, learned AT has accepted the reliance of DIAL on various
Central Government notifications, State Government notifications to
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 43 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
hold that outbreak of Covid-19 pandemic is a force majeure event. The
contention of the petitioner is that for an event to be force majeure, it
has to fulfill the conditions as being laid down in Article 16.1.1, 16.1.2
and 16.1.3. It is the contention of AAI that under Article 16.1.1, the
party can only claim ‘to suspend’ or ‘to excuse’ the obligation only ‘to
the extent’ that the party ―is unable to render such performance‖. Thus,
the contention is that there can only be ―suspension‖ or ―excusal‖ to the
extent that the party is unable to render such performance. Further, the
contention of AAI is that the force majeure can only be invoked if there
is a strict compliance of Article 16.1.5. Learned SG has argued
vehemently that since there was no inability on the part of MIAL to pay
the fee, the force majeure event on the face of it could not have been
held to have occurred. It has also been submitted that even as per
Article 16.1.2(e) the events as described in 16.1.2 from to (a) to (d)
should be read alongwith Article 16.1.1. Though it has not been
disputed that as per Article 16.1.3(VII) there was an epidemic within
India. However, it has been submitted that this itself alone is not
sufficient to invoke Chapter-XVI. The another contention is that the
procedure for force majeure as prescribed in Article 16.1 has not been
complied with.
67. Learned AT while determining the question of occurrence of event of
force majeure has taken into account various circumstances including
the AAI’s letter dated 30.03.2020 and noted that AAI on the account of
the prevailing circumstances at the relevant time decided to defer the
obligations of AF. Learned AT took this as tacit admission. Learned
AT had also taken into account the position taken by the Government
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 44 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
of India that Covid-19 is a force majeure event. Reliance has been
placed upon the various circulars, notifications and orders issued from
time to time. In this regard, learned AT in Para-80 of the impugned
award inter alia held as under:
“80. In the factual matrix of the present case, as regards
Articles 16.1.1 and 16.1.5 (a), the contention of Respondent
No.1 that the Claimant has not validly invoked the force
majeure clause is misconceived because in its letter dated
30th March 2020 deferring the obligation to pay the
Monthly Annual Fee for the months of April, May, and June
2020, it has made a tacit admission that force majeure has
occurred; and keeping in view the circumstances prevailing
at the relevant time, it had decided to defer certain
obligations mentioned in its 30th March 2020 letter. Indeed,
it is disingenuous for Respondent No.1 to contend that a
force majeure event had not occurred in light of the
promulgations of the Central and State Governments, the
Orders of the Supreme Court of India, and significantly its
own decision to grant repeated relief to an overwhelming
majority of its own concessionaires. This Tribunal holds
that a force majeure event within the postulation of Chapter
XVI of the OMDA had occurred. The duration / period when
force majeure subsisted shall be adverted to later.”
68. Learned senior counsel for MIAL has invited the attention of the Court
to Question 10 & 11 put in the cross-examination of RW-1 wherein the
expert witness admitted that she had not examined the effect of force
majeure. Question 10 & 11 are reproduced as under:
“Q.10 Is it your evidence that apart from Chapter XI of
the OMDA you have not read and interpreted any other
provisions of the OMDA?
Ans. I have read the OMDA and commented only on
Chapter-XI – Fees in the OMDA in my Report at
paragraphs 7.2 to 7.13 on pages 24 to 27 of my Report.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 45 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
[Shown paragraph 3.1 of the Expert Report attached
with witness affidavit at page 11]Q.11 Is it your evidence that despite of being instructed
to examine “…AAI contends that the Claimant has failed
to demonstrate that it is unable to render its obligation
to pay MAF by virtue of an event of force majeure”, you
have not examined the effect of force majeure in the
present case?
Ans. Yes, it is correct.”
69. It is pertinent to mention here that Article 16.1.2 stipulates condition
(a) to (e) for making any event or circumstances as the force majeure.
Perusal of the record indicates that the learned AT has duly taken this
into account. This Court also considers that it cannot be disputed
Covid-19 was an event which was not within the reasonable control of
MIAL and could not have prevented or overcome the sane with the
exercise of good industrial practice or reasonable skill or care. Nor did
it happen from the negligence or misconduct of MIAL or the failure of
the MIAL to perform its obligations. Thus on the face of it conditions
(b), (c) and (d) stand satisfied. The financial statements submitted by
the MIAL on record during the arbitral proceedings also shows that the
pandemic had ‘materially and adversely’ affected the performance of an
obligation. Learned AT has rightly noted that aeronautical and non-
aeronautical services are directly dependent on the ATM and PTM and
therefore in the event of decrease in the ATM and PTM, MIAL failed
to generate requisite revenue and certainly got impacted detrimentally.
The impact of Covid-19 on the revenue of the respondent was
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 46 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
discussed by the learned AT in its Para-106 to 109 which are
reproduced as under:
“106. We next proceed to examine the impact of Covid-
19 on the Airport operations. The Claimant, as on 26th
March 2020 intimated to Respondent No.1, its fund
position, including payments to be made by 31st March
2020. As per the Standalone Ind AS Financial Statement
for the year ended 31st March 2021, the total
income/receipts/collections/revenue from the sundry
operations of the Airport aggregated Rs.1826.64 Crores,
whilst the total expenses aggregated Rs.2311.21 Crores.
Similarly, the Standalone Ind AS Financial Statement
for the year ended 31st March 2022 shows that the total
income/receipts/collections/revenue from the Airport
were less than the expenses incurred for its operation. It
will be advantageous to reproduce the relevant extracts
of the Annual Report of Respondent No.1 itself, for the
year 2020-21:
“…
The Covid-19 pandemic has substantially altered
the global economic landscape. A far-reaching
impact of the global crisis on the aviation section
was due to the imposition of travel restrictions and
a decimation in passenger demand. The shock
posed by Covid-19 disrupted the long spell of
robust growth enjoyed by the aviation section in the
last few years. According to ICAO, in 2021 there
was an overall reduction of 50% in air passengers
(both international and domestic) couples with a
40% reduction in seats offered by airlines as
compared to 2019. Moreover, the losses of global
airlines in gross passenger operating revenues
have mounted to approximately USD 323 to 330
billion.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 47 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Aircraft & Passenger Movement
The overall impact of COVID-19 on Traffic
Movement in FY 2020-21 as compared to FY 2019-
20 and for the period April to November of FY
2021-22 as compared to the same period of FY
2019-20 (Pre Covid-Period) is given below:
107. As per the details of Aircraft and Passengers
movement submitted by the Claimant, (which in turn
have been taken from the website of Respondent No.1),
for the period of March 2019 to January 202259, the
impact can be seen as under:
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 48 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 49 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
108. A perusal of the above tables would show that the
international aircraft movement reduced from 7068 in
March 2019 to 630 in April 2020; and domestic aircraft
movement reduced from 15699 March 2019 to 305 in
April 2020. These numbers gradually increased May
2020 and as on January 2022, the international aircraft
movement stood at 3794; and domestic aircraft
movement as on January 2022 stood at 13,057.
Similarly international passengers numbers reduced
from 11,59,726 in March 2019 to 7956 in April 2020;
and domestic passengers reduced from 24,12,096 in
March 2019 to 1095 in April 2020. These numbers
gradually increased in May 2020 and as on January
2022, the international passenger movement stood at
3,70,681; and domestic passenger movement as on
January 2022 stood at 13,83,435. It is noted that the
domestic passenger movement stood at 20,05,635,
24,30,735, and 25,37,960 in October, November, and
December 2021 respectively.
109. These statistics show beyond disputation that the
capability of the Claimant to earn revenues was adversely
and acutely affected commencing from the last week of
March 2020. Although the figures placed on record refer to
the monthly aircraft and passenger movement, however, the
restrictions were imposed by the Government between 15th
and 22nd March 2020. Therefore, the impact of these
restrictions was eventually evident from April 2020
onwards. The impact, as is seen from the aforesaid
statistics, which are taken out from the website ofSignature Not Verified
O.M.P. (COMM) 185/2024 Page 50 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Respondent No.1, was acute/severe and therefore, we are
convinced that the outbreak of Covid-19 had
adversely/materially impacted the capability of the
Claimant to operate the Airport, such that the expenses
were greater than and exceeded the receipts. We cannot
agree with the Expert witness produced by Respondent No.1
that investments made by the Claimant in the normal course
of business in the previous financial years (such as in the
Navi Mumbai Airport) could be taken into reckoning to
conclude that profits were available with the Claimant even
during the force majeure period.”
70. Perusal of the above said para(s) would indicate that the total
income/receipt/collection/revenue from the airport were less than the
expenses incurred for its operation as on the year ending 31.03.2021
and 31.03.2022. There was a drastic fall in the aircraft and passenger
movement on the both domestic and international sector. It is also
pertinent to mention here that there was no option for the respondent to
close the operation. It has also to be taken into account that the MIAL
was running the Chhatrapati Shivaji Maharaj International Airport,
Mumbai which is one of the landmark airports of this country and as
per the OMDA, MIAL was under obligation to incur all cost in the
maintenance and operation of the said airport. It is also a matter of
record that MIAL had written several communication dated
17.03.2020, 24.03.2020 and 26.03.2020 in this regard.
71. The perusal of the impugned award indicates that the learned AT had
taken into account the financial statements of MIAL for the financial
years 2018-19, 2019-20, 2020-21 and audited financial statement of
financial year 2021-22. Learned AT noted that these figures in these
statements were not questioned or challenged by AAI in the cross-
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 51 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
examination. In regard to the inability of MIAL to pay the annual fee,
learned AT in para-131 inter alia held as under:
“131. Pertinently, copy of the Claimant’s financial
statement of FY 2018-2019 (Ex CW-1/82), copy of
Claimant’s financial statement of FY 2019-2020 (Ex CW-
1/83), copy of Claimant’s audited financial statement of FY
2020-2021 for the year ended 31st March 2021 (Ex CW-
1/62) and copy of Claimant’s audited financial statement of
FY 2021-2022 (Ex RW-1/X/F), which contain the figures
referred to in the above table, have not been questioned or
challenged by Respondent No.1 in cross-examination. It is
noteworthy that the Claimant in its letter dated 17th March
202070 addressed to Respondent No.1 invoked the
provisions contained in Article 16 of OMDA with effect
from 13th March 2020 i.e. date of notification issued by
GoM under Epidemic Diseases Act, 1897; having received
no response from Respondent No. 1, the Claimant issued
another communication dated 24th March 2020 informing
Respondent No.1 about the drastic impact of Covid-19 on its
activities. Relying upon Circular dated 19.03.2020 issued by
Office of Director of Director General of Civil Aviation and
Order dated 23.03.2020 issued by Ministry of Civil
Aviation, the Claimant stated that “as a result, airport
operations have come to a grinding halt though without
reduction in operating expenditure. With complete choking
of revenues without any reduction in operating expenditure,
a situation has come where cash flow has turned negative.
MLAL has no funds available for meeting its immediate
requirements as revenue inflow has completely stopped.
Only amounts available which can be utilised to meet
immediate obligations is in AAI Fee Account.” The
Claimant has asserted, with this position being reiterated by
CW-1 in his evidence, that the Claimant had suffered a
‘negative net cash flow’ after 23rd March 2020. It is also
pertinent to note that it has been admitted by CW-1 in his
cross-examination that even in those years when the
Claimant had incurred losses prior to FY 2019-2020, theSignature Not Verified
O.M.P. (COMM) 185/2024 Page 52 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Claimant had paid Annual Fees to the Respondent No.1
(Question No. 43 and 45). It is not in dispute that the
Respondent No.1 is a shareholder in the JVC, holding 26
percent of equity in the Claimant and a significant presence
on its Board, and is therefore fully aware of the losses being
incurred by the Claimant in the maintenance and operation
of the Airport and the veracity or correctness of the
Claimant’s financial statements/ position. The opposition to
payment of Annual Fee in the relevant period is predicated
not on the ground of the Claimant having incurred losses
(since it is correct that the OMDA does not guarantee
profits to the Claimant), but owing to the occurrence of
force majeure circumstances arising out of Covid-19
pandemic.”
72. It is also a matter of the record that the restrictions were
imposed/extended from time to time on domestic and international
travel which resulted in the reduction of ATM and PTM. This court
finds no fault in the learned AT’s finding that capability of MIAL to
generate revenue was materially and adversely affected starting from
the last week of March 2020. The outbreak of Covid-19 had materially
and adversely affected the airport’s operational capacity, resulting in
expenses surpassing the receipts. It may also be reiterated even at the
cost of the brevity that there was no option for MIAL to close down the
airport. There is a force in the contention of MIAL that the finding of
learned AT qua ―inability‖ is a finding of fact based on evidence
presented before it and there is no jurisdiction with the Court under
Section 34 to interfere into the same.
73. AAI has taken a plea that since MIAL continued paying actual fee
therefore it cannot be said that it was ―unable to pay‖. However, there
is a force in the contention of MIAL that these payments were made
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 53 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
were pursuant to the order dated 22.12.2021 which was based on the
joint application dated 13.12.2021. It has to be noted that the MIAL
had stated that the said orders were made without prejudice as an
interim arrangement. The question here is not that whether it was made
voluntarily or involuntarily, the question is that whether merely factum
of payment of AF will negate the plea of MIAL that in view of the
reduction in the ATM & PTM, they were unable to pay the fee in
accordance with the Article 11. MIAL was certainly at the receiving
end, they had to run the operations of the Airport as well as, as a
commercial venture had to fulfill their obligations. The Court does not
find any fault with the finding of the learned AT that merely because
the payment was made, it cannot be held that they were unable to make
payment of the fee. It is also pertinent to mention here that the
testimony of the expert witness was threadbare examined by learned
AT, in para-103 of the impugned award and same is reproduced herein
below:
103. However, RW-1 in her cross-examination has admitted
to not examining the effect of Force majeure in the present
case (Q.11) and not undertaking a forensic accounting
(Q.255). RW-1 has added payments from FY 2017-2018 and
FY 2018-2019 including amounts invested in the Navi
Mumbai International Airport Limited. RW-1 has stated that
the Claimant was not in a cash deficit position on 26th
March 2020 but in fact had a cash surplus of at least INR
106 crores or INR 320 crores on that date, and in support of
her averments adjusted the following categories of
payments: (1) investment in Navi Mumbai Airport (NMIAL)
of INR 905 crores; (2) unexplained transfers of INR 214.52
crores; (3) debt servicing obligations of INR 65 crores not
paid; (4) costs amounting to INR 29 crores unrelated toSignature Not Verified
O.M.P. (COMM) 185/2024 Page 54 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
MIAL’s operations; (5) Inflated expenses of INR 22 crores.
The Claimant has countered the statements made by RW-1
in the following manner:
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 55 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 56 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
74. The said testimony was rejected by the learned AT and it was inter alia
held that the Tribunal could not agree with the Expert witness produced
by the Petitioner herein that investments made by Respondent No.1
herein in the normal course of business in the previous financial years
(such as in the Navi Mumbai Airport) could be taken into reckoning to
conclude that profits were available with Respondent No.1 even during
the force majeure period.
75. This Court considers that there is no ground to interfere into the finding
of the learned AT on this ground.
76. The next contention of AAI is that the learned AT has fallen into error
of granting the relief to the MIAL of being ―excused‖ from its
obligation as per Article 16.1.1 of OMDA. Article 16.1.1 of OMDA is
reproduced as under:
―16.1 Force Majeure
16.1.1 The JVC, or AAI, as the case may be, shall be
entitled to suspend or excuse performance of its respective
obligations under this Agreement to the extent that AAI or
JVC, as the case may be, is unable to render such
performance by an event of Force Majeure (a “Force
Majeure”).”
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 57 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
77. Learned AT, in this regard gave its finding in para-115 which is
reproduced herein below:
“115. It is also noteworthy that the arguments on behalf of
Respondent No.1 almost entirely ignore the word ‘excuse.
The Tribunal cannot countenance an interpretation which
would render either of the words ‘suspend’ or ‘excuse’ to be
superfluous and a surplusage. For this proposition we need
only mention J.K. Cotton Spinning & Weaving Mills v State
of U.P. AIR 1961 SC 1170. When construing any provision
it is salutary to assume that every word has been employed
for a specific reason and intent; the use of ‘or’ is indicative
of the contemplation of a different factual matrix. It is tell-
tale that the Respondent has preferred to use the word
‘defer’ in its Written Arguments; equally tell-tale is the
absence of the use of explanation of the word ‘excuse”
without making any effort to establish that both words have
the same effect. This is especially so since what is being
dealt with in this Article is the occurrence of a very rare
event ie. of force majeure. Considering that two separate
consequences of an event had been postulated, it still
remains the difficult task of the Tribunal to determine
whether a temporary deferment or a complete excusal is the
apposite conclusion.”
78. As it has been discussed in detail herein above that the interpretation of
a contract falls within the domain of Arbitral Tribunal. The
interpretation of contract if it is plausible or even may be possible
cannot be set aside only because there can be alternative interpretation.
The interpretation adopted by an Arbitral Tribunal can be set aside only
if it is perverse. This Court considers that the interpretation adopted by
the learned AT in the present case in this regard cannot be termed to be
perverse. It is pertinent to reproduce further findings of the learned AT
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 58 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
in this regard as contained in para-105 and 116 which is reproduced as
under:
“105 It cannot be anyone’s case that the Claimant had an
option not to operate the Airport in which event, the
revenues, if any, would have been reduced to zero,
nullifying the entire object of the Contract to redundancy.
Therefore, it is important to test the veracity and the
strength of the Claimant’s “inability” in this context. It
would be too simplistic a proposition to say that the
Claimant must pay 38.7 percent of whatever its earnings are
without taking into consideration the fact that the Claimant
is obligated to ensure smooth functioning of the Airport in
entirety without any support from Respondent No.1. In our
view, a reading of Chapter XVI would show that the
Claimant was unable to render the operation and
maintenance of all functions/activities of the Airport with
whatever revenues it was earning at the relevant time. If the
receipts and earnings from the operation of the Airport are
inadequate for maintaining and servicing the Airport, it is
illogical to nevertheless maintain that the Claimant would
be liable to pay a percentage of the receipts towards the
MAF. The Tribunal is of the considered opinion that during
the force majeure period the revenue receipts/collections
would have to be used firstly for running the Airport, and in
the event that there is a surplus thereafter, the surplus
would have to be shared between the Claimant and
Respondent in the contractual ratio. This conclusion will
fulfil the intent and postulation of Chapter XVI. The fact
that Respondent No.1 had itself waived the dues of its
concessionaires, justifies repetition. The Claimant has,
indubitably, been bearing the burden of all the expenses for
ensuring the smooth running the Airport. If the cumulative
revenue from the operation of the Airport post parting with
38.7 percent thereof to Respondent No.1 remains deficient,
OMDA does not envisage of require the Claimant to make
up the shortfall from any other sources.
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 59 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
116. The Tribunal must not lose sight of the fact that it is
seized of a force majeure event during which the Claimant
had perforce to perform all its obligations as envisaged in
the OMDA. Indeed, even if the Claimant was desirous of
terminating the contract/OMDA it could not have done so
because the Airport services were mandated to continue to
function for handling permitted flight
operations/transportation for essential goods/ medicine, and
to ensure law and order and emergency services, and hence,
even though the aircraft and passenger movement had
drastically reduced, the Claimant was compelled by law to
incur all costs in the maintenance and operation of the
Airport. The force majeure doctrine contemplates the
continuance in contradistinction to the cancellation of a
contract on the grounds of frustration or impossibility of
performance (the latter being covered by Section 56 of the
Contract Act), the sine qua non being that neither party (or
only one of them) should be unduly made to suffer losses.
The Claimant cannot be heard to complain that it was
entitled to reasonable profits as in yesteryears; equally the
Respondent cannot be heard to demand its MAF even
though this payment would add to the losses being incurred
in this period by the Claimant. In these circumstances the
Tribunal concludes that during the continuance of force
majeure the Claimant is excused/exempted from payment of
MAF until the time its revenue or receipts or collections had
exceeded its expenses in maintaining the Airport and
ensuring its proper operability, as conceived in the
OMDA.”
79. This Court does not find any fault with the finding of the learned AT
that MIAL cannot be forced to pay the fee irrespective of the revenue,
despite the fact that there is an obligation on the MIAL to ensure
smooth functioning of the airport. The first and foremost duty of the
MIAL is to ensure that the airport is duly maintained and serviced. This
Court is conscious of the fact that while entertaining a petition under
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 60 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Section 34, the Court does not have the appellate jurisdiction and
therefore even if some alternative view could be taken, it is not
permissible to set aside the view taken by the arbitrator. The purpose of
the force majeure clause in any contract is to ensure that the business
must continue and should not come to an end. The purpose is to
prevent the party from suffering the losses or to mitigate the same.
Learned AT has rightly noted that MIAL cannot be permitted to say
that it is entitled to reasonable profit as previous years and in the same
fashion AAI cannot be allowed to demand its AF even though this
payment would add to the losses being incurred in this period by
MIAL. As stated above, force majeure clause is like an eclipse to the
general clauses i.e., if the force majeure clauses comes into the
existence the general clauses eclipses during that period.
80. This Court considers that the interpretation adopted by the learned AT
is correct and in furtherance of business efficacy and the object of the
OMDA. Hypothetically, if the reverse view is taken that is even despite
reduction in the revenue, MIAL is made to pay the fee even out of its
nose, this Court considers that the same would be against the object and
intention of the OMDA. Petitioner has taken a plea that the MIAL vide
its letter dated 11.03.2021 itself has stated that force majeure had
ceased and therefore no relief could have been granted thereafter. In
this regard it is necessary to reproduce Article 16.1.5 clause (c) which
reads as under:
“16.1.5 Procedure for Force Majeure
(c) The time for performance by the affected Party of any
obligation of compliance by the affected Party with any timeSignature Not Verified
O.M.P. (COMM) 185/2024 Page 61 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
limit affected by Force Majeure, and for the exercise of any
right affected thereby, shall be extended by the period
during which such Force Majeure continues and by such
additional period thereafter as is necessary to enable the
affected Party to achieve the level of activity prevailing
before the event of Force Majeure.”
81. The bare perusal of this makes it clear that there is a concept of
achieving the level of activity prevailing before the event of force
majeure. Learned AT returned a finding of the fact that the exact date
on which activities would return to the pre-force majeure level could
not be determined and left it open. However, after considering the
financial statements of MIAL upto December 2021 and the data of
ATM, and PTM available on AAI’s website, which indicated that pre-
Covid activity levels had not been reached by 28.02.2022. Learned AT
noted that while gross revenue was Rs. 182.09 crores, expenditure
stood at Rs. 191.06 crores. It was also noted that neither party provided
records regarding the date when Covid-19/force majeure ceased to exist
or when MIAL’s cash flow turned positive. Learned AT took into
account that the Government of India lifted restrictions on aeronautical
and non-aeronautical services in a phased manner starting from
25.05.2020, permitting essential domestic operations in limited
capacity, though international travel remained suspended until
31.03.2021. The learned AT further noted that the second wave of
Covid-19 impacted India in March 2021. In these circumstances, the
learned AT adopted 28.02.2022 as the effective date, based on the
Supreme Court of India’s review regarding the period of limitation due
to Covid-19. While it is true that the learned AT’s approach was based
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 62 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
on some guess work, however, it was the best alternative view
available in the absence of concrete evidence. This Court finds no
perversity in the learned AT’s decision.
82. Petitioner has assailed the impugned award on the ground that the
learned AT has re-written the terms of the OMDA and Escrow
agreement by turning the ‗Revenue Sharing Contract’ into ‗Profit
Sharing Contract’. It has already been discussed herein above that there
was no option for the MIAL but to operate the airport. The contention
of MIAL in this regard is that the learned AT after duly taking into
account the revenue generated during this period and the fact that
expenditure was more than the revenue interpreted Chapter-XVI of the
OMDA and granted relief to MIAL. The Court finds substance in the
contention of the MIAL in this regard and is unable to persuade itself to
agree with the contention of the AAI that the learned AT has re-written
the contract while granting the relief to MIAL. In regard to the
extension of the term of OMDA, learned AT has relied upon Article
16.1.5(c) of the OMDA.
83. An Operation Management and Development Agreement (‗OMDA’)
was entered into between the parties on 04.04.2006 and the genesis of
entire dispute between the parties is the interpretation of Article 16 of
the said agreement executed between the parties. Before proceeding
further, it is advantageous to look at some of the salient features of the
OMDA. The preface of the OMDA reads as under:-
WHEREAS:
(A) AAI is an authority established under the Airports Authority
of India Act, 1994 (the “AAI Act“), which is responsible forSignature Not Verified
O.M.P. (COMM) 185/2024 Page 63 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
the development, operation, management and maintenance
of airports in India.
(B) AAI, in the interest of the better m3nogement of the Airport
(as defined herein) and/or overall public interest is desirous
of granting some of its functions, being the functions of
operating, maintaining, developing, designing, constructing,
upgrading, modernising. financing and managing the
Airport to the JVC and for this purpose to lease the
premises constituting the Airport Site (as defined herein), in
accordance with the terms and conditions set forth herein.
(C) JVC is a company established, inter-alia with the objectives
of operating, maintaining, developing, designing,
constructing, upgrading, modernising, financing and
managing the Airport (as defined herein).
(D) JVC is desirous and agreeable to undertake the function of
operating, maintaining, developing, designing, constructing,
upgrading, modernising, financing and managing the
Airport (as defined herein) on and subject to the terms and
conditions set forth herein.
84. It is also necessary to refer to Article 2.1.1 which reads as under:
―2.1.1 AAI hereby grants to the JVC, the exclusive right and
authority during the Term to undertake some of the
functions of the AAI being the functions of operation,
maintenance, development, design, construction,
upgradation, modernization, finance and management of the
Airport and to perform services and activities constituting
Aeronautical Services, and Non-Aeronautical Services (but
excluding Reserved Activities) at the Airport and the JVC
hereby agrees to undertake the functions of operation,
maintenance, development, design, construction,
upgradation, modernization, finance and management of the
Airport and at all times keep in good repair and operatingSignature Not Verified
O.M.P. (COMM) 185/2024 Page 64 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
condition the Airport and to perform services and activities
constituting Aeronautical Services and Non-Acronautical
Services (but excluding Reserved Activities) at the Airport,
in accordance with the terms and conditions of this
Agreement (the “Grant”).‖
85. The perusal of the OMDA makes it clear that the MIAL was tasked
with the operation, maintenance, development, design, construction,
upgradation, modernization, and financing of the Mumbai Airport, a
responsibility that required significant investment. It is a well-known
fact that no one could have predicted the onset of a pandemic like
COVID-19. When the pandemic began in March 2020, its full impact
was not understood by anyone. Initially, people assumed it would last
for a few days, then weeks, and eventually, months. However, as the
pandemic unfolded, it caused severe disruption during the first wave
and returned in 2021 with a second wave, inflicting unimaginable
losses both in terms of human lives and the economy. God forbid such
an event should occur again.
86. The learned AT has returned a finding of fact that there was indeed a
force majeure period and thus, while exercising its jurisdiction, the
learned AT granted a two-year extension for the OMDA under Article
16.1.5(c).
87. This Court finds that the learned AT’s direction to extend the term of
OMDA is consistent with its findings regarding the payment of fees. It
considers that the learned AT rightly took into account the commercial
realities and extended the contract’s term appropriately.
88. It may also be prudent to refer to the letter dated 30.03.2020 from AAI
which reveals that their tacit admission to the occurrence of Force
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 65 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
Majeure. This communication occurred when COVID-19 had just
begun, and at that time, the full scope of its impact was unknown. Even
the best scientists and economists were uncertain about the pandemic’s
long-term effects. The world was in the early stages of trying to
manage the situation, and it was unimaginable that its effects would
last as long as they did. At the time, AAI reasonably assumed that the
impact would be short-lived, likely continuing only until June 2020,
and thus accommodated the MIAL. However, it is now widely
recognized that the pandemic lasted far longer than anticipated.
89. It is a matter of common acknowledge that during Covid it had
materially and adversely effected the function of the business. The
learned AT taking into account the terms of the contract and the trade
and usages along with the commercial sense has taken a holistic view
in extending the tenure of the contract. The findings of the learned AT
are based on these facts, and the Court does not find any perversity in
them. It is also important to note that just because another view might
have been possible, the Court cannot substitute its own opinion.
90. The facts and contentions of the parties as well as the finding in the
award as challenged in both O.M.P. (COMM) 186/2024 and O.M.P.
(COMM) 185/2024 are similar. The terms and conditions of the
OMDA dated 04.04.2006 are also identical. The entire case revolves
around the interpretation of Article XVI of the OMDA. The question
was that whether the force majeure event had taken place in terms of
Article XVI and further, whether the petitioner can be excused from
paying the AF as provided under Article 11 for the period till
13.03.2020 to 28.02.2022. Another major bone of contention was the
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 66 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
extension of the term of the OMDA for the period of two years. The
plea of the petitioner was the force majeure event had not taken place
and there was no question of excusal of the payment of fee in terms of
the OMDA and furthermore, there was no provision for the extension
of the contract. Per contra, the contention of the respondents was that
the learned AT has granted the relief in terms of the terms of contract.
It is a settled preposition that interpretation of the terms of the contract
falls within the domain of the Arbitrator. The entire dispute in both the
cases revolved around the interpretation of the terms of the contract.
The discussion made hereinabove makes it clear that the learned AT
had passed a speaking order after taking into account the material and
the evidence available on the record. The perusal of the award makes it
clear that it cannot be said that the view taken by the Arbitrator is not a
possible and plausible view. It is also a settled preposition that even if
the alternative view is available, the Court cannot substitute its own.
This Court did not find any material to say that there was perversity in
the award passed by the learned AT.
91. In view of the above, the Court considers that there is no illegality or
perversity in the impugned award passed by learned AT. Hence, the
present petition along with pending applications, if any, stands
dismissed.
DINESH KUMAR SHARMA, J
MARCH 7, 2025
AR/SMG
Signature Not Verified
O.M.P. (COMM) 185/2024 Page 67 of 67
Signed By:NIDHI
Signing Date:07.03.2025
18:39:50
