Isabella Mariam

The High Court of Judicature at Bombay Single Bench of Justice Somasekhar Sundaresan vacated the ad-interim protection previously granted to a ground handling service provider, holding that continued restraint on appointing a replacement operator was no longer viable. The Court directed that the respondent was free to proceed with the replacement process in accordance with the tender underway, as the final judicial outcome from the Delhi High Court had now been rendered.

The Court noted that the matter in question pertained to security clearance, which formed a vital statutory precondition for the continuance of the contractual relationship between the parties. Following the Delhi High Court’s judgment upholding the revocation of security clearance granted to the petitioner’s sister concern, the Bombay High Court observed that the challenge on similar grounds had already been judicially determined. Accordingly, the interim protection, which had only been a pro-tem holding measure, stood vacated.

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The Court clarified that its order did not express any opinion on the merits of the revocation or any arbitration disputes that may arise, and left the parties to assert their respective rights under law.

The petitions before the High Court of Judicature at Bombay were filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection with respect to two Concession Agreements under which ground handling and bridge mounting services were contracted. The petitioner had been rendering these services to the respondent under said agreements.

The petitioner’s sister concerns were also engaged in providing similar services at various airports across India. The respondent, in the present case, was a joint venture between the Airports Authority of India and a large Indian private sector group. The issue before the Court was whether the Concession Agreements could be terminated arbitrarily or whether a cause was required for termination, including a cure period.

On May 15, 2025, the Bureau of Civil Aviation Security revoked the security clearance granted to the petitioner. Subsequently, when the matter came before the Vacation Court on May 26, 2025, it was clarified that since the date of revocation, the entire set of employees of the petitioner had been transitioned to Indo Thai Airport Management Services Private Limited.

These employees, each holding individual security clearances, continued to be deployed for the same work. Additionally, all equipment on the petitioner’s balance sheet was placed under the control of Indo Thai. Effectively, although operations continued with the same personnel and equipment, the petitioner was excluded from ownership and management access to the airport premises.

The petitioner also made a public statement that it would not be responsible for services post May 15, 2025, having lost control over personnel and equipment. Since then, Indo Thai has been running the ground handling and bridge mounting services at the Mumbai International Airport.

The relief sought by the petitioner was focused on preserving its commercial and economic interests under the Concession Agreements, especially in light of ongoing writ petitions before the Delhi High Court, where the challenge to the revocation of security clearance was being heard. Judgment in those petitions had been reserved and was expected soon.

However, during this interregnum, the respondent not only terminated the agreements and replaced the petitioner with Indo Thai but also floated a tender inviting bids for permanent replacement.

The petitioner contended that if a final outcome were to be reached in the Delhi High Court, it would determine its rights. However, any final replacement before the delivery of judgment would cause irreparable harm, even if the revocation was later held invalid.

Taking note of the statutory importance of the security clearance and the fact that the petitioner’s access had already been effectively revoked, the Court had initially granted limited protection by ad-interim relief. This protection was limited to restraining final and permanent replacement until the Court reopened. The Court allowed the tender process to proceed, but restrained final appointment until further orders.

Upon reopening, the matter was adjourned on mutual accommodation between counsel. The matter came up for hearing after the Delhi High Court delivered its judgment on July 7, 2025. The Delhi High Court upheld the revocation of security clearance without prior notice and did not grant relief to the petitioner’s sister concern.

Multiple High Courts, including the Madras High Court and a Division Bench of the Bombay High Court, had deferred hearing their own writ petitions on similar issues pending the Delhi High Court’s decision. The Madras High Court was hearing proceedings involving the Airports Authority of India as the respondent, where similar submissions were made.

The Court observed that "the security clearance being a vital statutory approval for continuance of these Concession Agreements", the events that had taken place, particularly the transition of personnel and equipment, left the petitioner without control over operations.

It was recorded that "the very same equipment and employees were continued to be used at the airport without any change to threat perception (i.e. national security concerns having been addressed)."

In light of this, the Court had earlier afforded "limited protection ... by ad interim relief against final and permanent replacement until re-opening of the Court." It had clarified that "the tender process was not stalled and it could continue until the point of selection of the replacement operator, and only the actual final appointment was to be kept on hold."

After the Delhi High Court judgment, the Bombay High Court observed that "the Delhi High Court has upheld the revocation without prior notice, and has not granted any relief to the sister concern of the Petitioner."

It further recorded that "multiple High Courts seized of writ petitions have also been awaiting the outcome of the proceedings in the Delhi High Court."

Referring to these developments, the Court stated: "what becomes inexorably clear is that holding up the final appointment of the replacement operator in Mumbai would no longer be tenable."

The Court considered the scope of relief that could be granted by an Arbitral Tribunal and stated: "it would not be possible for an Arbitral Tribunal to grant specific performance and cancel the replacement of the Petitioner in the two Concession Agreements, now that the challenge to the grounds of revocation to an identically-placed sister concern has also been judicially ruled on."

The Court stated that "the ad-interim protection granted on May 26, 2025, is hereby vacated. The Respondent shall be free to replace the Petitioner pursuant to the tender process being conducted."

It was further recorded that "Learned Senior Counsel for both parties submit that a conciliation process is actively underway, and officials of the senior management of the two sides are scheduled to meet soon."

The Court also took note that "Inventory of the equipment of the Petitioner has been made and there are certain differences of opinion on missing equipment and such issues. The parties may thrash these out in the conciliation efforts."

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The judgment clarified that "Should any disputes and differences remain, the parties would proceed to arbitration. If they are unable to agree on the arbitrator ... the jurisdiction under Section 11 of the Act would be available."

The Court concluded that "If at that stage any specific protective relief is necessary, it would be open to either party to seek relief in a fresh petition under Section 9 of the Act or under Section 17 of the Act before the Arbitral Tribunal."

Finally, the Court disposed of the petitions, stating: "both the captioned proceedings stand disposed of with the aforesaid observations. It is made clear, that no further protective or holding measures, one way or the other, remain." The Court noted that "Disposal of these Petitions and vacation of the ad interim relief, which was a pro-tem holding measure, is not an expression of an opinion on the merits of the matter."

Advocates Representing the Parties:

For the Petitioners: Mr. Chetan Kapadia, Senior Advocate a/w. Mayank Samuel, Neelanshu Roy and Drumi Nishar i/b Mayank Samuel (Sirius Legal)

For the Respondents: Mr. Vikram Nankani, Senior Advocate a/w. Mr. Sumeet Nankani, Ms. Shoma Maitra and Mr. Nipeksh Arvind Jain i/b Wadia Ghandy & Co.

Case Title: Celebi NAS Airport Services India Pvt Ltd vs Mumbai International Airport Limited

Neutral Citation: 2025: BHC-OS:11778

Case Number: COMMERCIAL ARBITRATION PETITION (L) NO. 15961 OF 2025 WITH COMMERCIAL ARBITRATION PETITION (L) NO. 15987 OF 2025

Bench: Justice Somasekhar Sundaresan