Mumbai International Airport Limited vs Airports Authority Of India
- Court
- Delhi High Court
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 09.10.2026
Judgment pronounced on: 16.10.2026
Judgment uploaded on: 16.10.2026
# CNR No. DLHC010582532024
+ FAO(OS) (COMM) 202/2024
MUMBAI INTERNATIONAL AIRPORT LIMITED
.....Appellant
Through: Mr. Rajiv Nayar, Sr Adv, Ms.
Kanika Singh, Ms. Ishanee
Kapoor, Ms. Janhavi Negi,, Mr.
Pratham Vir Agarwal and Mr.
Naman Maheshwari, Advs.
versus
AIRPORTS AUTHORITY OF INDIA .....Respondent
Through: Mr. Raghavendra P. Shankar,
ASG with Mr. Karan Lahiri,
Mr. Prateek Arora, Ms. Pallavi
Mishra and Ms. Kanishka
Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE BHARAT PARASHAR
J U D G M E N T
ANIL KSHETARPAL, J.:
1
1. The present Appeal under Section 37 of the Arbitration and
2
Conciliation Act, 1996 , read with Section 13 of the Commercial
Courts Act, 2015, has been preferred by the Appellant, Mumbai
3
International Airport Limited , assailing the judgment dated
1
Hereinafter referred to as „Section 37‟
2
Hereinafter referred to as „A&C Act‟
3
Hereinafter referred to as „Appellant‟ or „MIAL‟
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4
10.04.2024 passed by the learned Single Judge in OMP (COMM.)
5
No.268/2023 , whereby the petition preferred by MIAL under Section
6 7
34 of the A&C Act challenging the arbitral award dated 23.03.2023
was dismissed.
2. The Award was rendered by a three-member Arbitral Tribunal
comprising Justice Deepak Gupta (Retd.), Justice C.K. Thakker
(Retd.) and Justice (Dr.) Arijit Pasayat (Retd.). The Tribunal rejected
8
MIAL‟s claims against the Respondent, Airports Authority of India ,
which principally concerned the alleged obligation of AAI to transfer
or assign its lessor‟s interest under the lease executed in favour of
9
Sahara (Batra) Hospitality Private Limited .
3. The principal questions which arise for consideration are:
i. Whether the Impugned Judgment discloses a failure to
apply the statutory standard governing a challenge under Section
34 merely because it reproduces portions of the Award.
ii. Whether the Tribunal‟s interpretation of the relevant
provisions of the Operation, Management and Development
10
Agreement dated 04.04.2006 and the Lease Deed dated
11
26.04.2006 is so perverse or unreasonable as to warrant
interference under Section 34.
iii. Whether the Tribunal‟s treatment of the letter dated
4
Hereinafter referred to as „Impugned Judgment‟
5
Hereinafter referred to as „Section 34 Petition‟
6
Hereinafter referred to as „Section 34‟
7
Hereinafter referred to as „Award‟
8
Hereinafter referred to as „Respondent‟ or „AAI‟
9
Hereinafter referred to as „Sahara‟
10
Hereinafter referred to as „OMDA‟
11
Hereinafter referred to as „MIAL Lease Deed‟
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09.06.2006, the parties‟ subsequent conduct and the
12
communications issued by the Ministry of Civil Aviation
discloses any ground for interference under Section 34,
warranting interference by this Court in the present Appeal under
Section 37.
FACTUAL MATRIX:
4. The relevant facts, necessary for adjudication of the present
Appeal, may be briefly noticed.
13
5. AAI had executed a Lease Agreement dated 05.06.2002 in
favour of Sahara in respect of land measuring approximately
30,047.12 square metres at Chhatrapati Shivaji Maharaj International
14
Airport, Mumbai . The lease was for a term of 29 years, ending on
04.06.2031.
6. Pursuant to the Government of India‟s policy of privatisation of
scheduled airports, MIAL was incorporated as a joint venture
15
company and the OMDA was executed between MIAL and AAI on
04.04.2006. MIAL took over the operation of Airport with effect from
03.05.2006. MIAL Lease Deed was also executed between the parties
on 26.04.2006 in relation to the Airport premises.
7. The OMDA defined „Existing Leases‟ as leases presently valid
and subsisting in respect of portions of the Airport, entered between
AAI and various third parties, details of which are set out in Schedule
28 appended thereto. The Sahara Lease was included in that Schedule.
12
Hereinafter referred to as „MoCA‟
13
Hereinafter referred to as „Sahara Lease‟
14
Hereinafter referred to as „Airport‟
15
Hereinafter referred to as „JVC‟
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Article 2.6.1 of the OMDA excluded land granted to third parties
under Existing Leases, as well as Carved Out Assets, from the land to
be demised to MIAL. Article 2.1.1 of the MIAL Lease Deed similarly
excluded such land from the Demised Premises and Article 2.1.2
thereto provided that, upon expiry or early termination of an Existing
Lease, the land concerned would thereafter form part of the Demised
Premises for the remaining term.
8. MIAL relies principally on Article 5.2(b)(i) of the OMDA. That
provision contemplated that, during the Transition Phase, MIAL
would use its best efforts and AAI would render reasonable assistance
to transfer or novate existing contracts and agreements between AAI
and third parties, insofar as they related to the Airport. It further
provided for MIAL to perform, at its own risk and cost, contracts
which could not be specifically novated, with the benefits arising from
such contracts vesting in MIAL. Article 20.3.2 of the OMDA provides
that, in the event of a conflict between the OMDA and a project
agreement, the OMDA would prevail.
9. MIAL‟s case is that Article 5.2(b)(i) required AAI to transfer or
novate the Sahara Lease, including the lessor‟s interest thereunder. It
also relies on the minutes of the Inter-Ministerial Group meeting dated
18.10.2004, which recorded a recommendation that the Sahara Lease
be assigned to the JVC, AAI‟s letter dated 09.06.2006, subsequent
payments of lease rent by AAI to MIAL, and communications issued
by MoCA in relation to the proposed transfer.
10. The Sahara Lease was never novated. Sahara did not accept
MIAL as its lessor and raised objections to MIAL‟s invoices. MIAL‟s
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case before the Tribunal was that AAI had, as an interim arrangement,
paid MIAL the lease amounts for approximately ten years, but stopped
making such payments with effect from 01.04.2019.
11. MIAL invoked arbitration and sought, inter alia , a declaration
and direction requiring AAI to transfer or assign the Sahara Lease, a
monetary claim towards land rent, a claim relating to minimum
guaranteed annual payment/turnover levy, and costs. The Tribunal
rejected all claims by its unanimous Award dated 23.03.2023. MIAL‟s
Section 34 Petition was thereafter dismissed by the learned Single
Judge by the Impugned Judgment.
12. It is in the aforesaid circumstances that the present Appeal has
been preferred.
CONTENTIONS OF THE PARTIES:
13. Learned senior counsel representing the parties were heard, and
the record, including the Impugned Judgment and the Award, has been
perused.
14. Learned senior counsel representing the MIAL has made the
following submissions:
i. The Impugned Judgment does not meaningfully consider
the grounds raised in the Section 34 Petition and substantially
reproduces the Award. Reliance is placed on Ajay Singh v. Kal
16
Airways Private Limited ; and Spicejet Limited v. Kal Airways
17
Private Limited , to contend that a court exercising jurisdiction
16
2024 SCC OnLine Del 3666
17
2023 SCC OnLine Del 4557
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under Section 34 must independently consider the challenges
raised against an award.
ii. The Tribunal has misconstrued Article 5.2(b)(i) of the
OMDA and thereby rewritten the contract. According to MIAL,
Article 2.6 of the OMDA and Articles 2.1.1 and 2.1.2 of the
MIAL Lease Deed deal with the demise of land and the creation
of MIAL‟s leasehold interest, whereas Article 5.2(b)(i) deals with
the transfer of AAI‟s rights as lessor under existing third-party
contracts. The provisions, therefore, operate in different fields
and are not inconsistent. The exclusion of Existing Leases from
the Demised Premises does not exclude the transfer of the
lessor‟s interest under those leases.
iii. Article 5.2(b)(i) expressly refers to „all existing contracts
and agreements‟ and contains no exception for Existing Leases,
except for Legacy Matters. The Tribunal read an additional
exception into the provision, contrary to its plain language.
Reliance is also placed on Article 20.3.2 of the OMDA and
18
Section 109 of the Transfer of Property Act, 1882 .
iv. The Tribunal ignored vital evidence, particularly AAI‟s
letter dated 09.06.2006, which stated that existing commercial
and land licence/lease agreements were required to be assigned or
novated to the joint venture company during the Transition
Phase. The learned Single Judge noticed this objection but failed
to return a specific finding on it. Reliance is placed on
Ssangyong Engineering & Construction Co. Ltd. v. National
18
Hereinafter referred to as „TPA‟
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19
Highways Authority of India , and other decisions concerning
interference where an arbitral tribunal ignores vital evidence.
v. AAI had transferred the rent and other benefits arising
from the Sahara Lease to MIAL for nearly ten years. According
to MIAL, this consistent conduct reflects AAI‟s own
understanding that the lessor‟s benefits under the Sahara Lease
were to vest in MIAL. MIAL further relies on communications
issued by MoCA, including those dated 14.05.2012, 17.06.2013,
27.12.2013 and 06.01.2017, and submits that the Tribunal erred
in holding that these communications were not policy directions
20
under Section 40 of the Airports Authority of India Act, 1994 .
15. Per contra , learned senior counsel representing the AAI has
made the following submissions:
i. The Award contains a detailed consideration of the
relevant contractual provisions and that the learned Single Judge
correctly declined to substitute the Tribunal‟s interpretation with
another possible view. It is contended that Article 2.6 of the
OMDA and Articles 2.1.1 and 2.1.2 of the MIAL Lease Deed
specifically exclude Existing Leases from the Demised Premises
and provide that the underlying land would become part of those
premises only upon expiry or early termination of the relevant
lease.
ii. The letter dated 09.06.2006 was noticed and reproduced
in the Award and that MIAL‟s reliance on a particular portion of
19
(2019) 15 SCC 131
20
Hereinafter referred to as „AAI Act‟
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the letter is, in substance, an invitation to re-appreciate the
evidence. The payments made over the years are stated to have
been an interim arrangement and do not establish that the Sahara
Lease stood transferred or novated. The plea of acquiescence,
waiver or estoppel was not advanced before the Tribunal and
cannot be introduced at this stage.
iii. As regards the MoCA communications, AAI contends
that these communications and the legal opinions referred to
therein could not amend or override the terms of the OMDA,
which is a bilateral contract. The communications did not
constitute directions on a question of policy within the meaning
of Section 40 of the AAI Act.
iv. The Award is a reasoned and unanimous decision, and no
ground for interference under Section 34, much less under
Section 37, is made out.
16. No other submissions have been advanced by learned senior
counsel representing the parties.
ANALYSIS AND FINDINGS:
17. This Court has considered the submissions advanced by learned
senior counsel for the parties and examined the Impugned Judgment,
the Award and the material placed on record. Before addressing the
specific grounds urged in the Appeal, it is necessary to delineate the
scope of interference available to this Court under Section 37.
18. The jurisdiction under Section 34 is limited and does not permit
the Court to sit in appeal over an arbitral award. An award cannot be
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set aside merely because the Court considers another interpretation of
the contract or a different appreciation of the evidence to be
preferable. The interpretation of contractual provisions ordinarily falls
within the domain of the Arbitral Tribunal. Interference is permissible
only where a ground recognised under Section 34 is established. In
particular, patent illegality under Section 34(2A) must go to the root
of the matter. It does not permit a reappreciation of evidence or
correction of every error in the Award. However, an award may be
vulnerable where the Tribunal disregards vital evidence in a manner
that vitiates its conclusion or adopts an interpretation that no fair-
minded or reasonable person could have arrived at on the terms of the
contract.
19. Further, the limits of appellate scrutiny under Section 37 are
narrower still. The appellate court does not undertake an independent
assessment of the merits of the Award. Its enquiry is confined to
determining whether the Court exercising jurisdiction under Section
34 has remained within the bounds of that provision. The Supreme
Court has repeatedly affirmed this position, including in MMTC Ltd.
21
v. Vedanta Ltd. , where it emphasised the limited and supervisory
nature of the jurisdiction under Section 37. The relevant extract reads
as follows:
“14. As far as interference with an order made Under Section 34, as
per Section 37, is concerned, it cannot be disputed that such
interference Under Section 37 cannot travel beyond the restrictions
laid down Under Section 34. In other words, the court cannot
undertake an independent assessment of the merits of the award, and
must only ascertain that the exercise of power by the court Under
Section 34 has not exceeded the scope of the provision. Thus, it is
evident that in case an arbitral award has been confirmed by the
21
(2019) 4 SCC 163
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court Under Section 34 and by the court in an appeal Under Section
37, this Court must be extremely cautious and slow to disturb such
concurrent findings. ”
( Emphasis supplied )
20. The Supreme Court has further reiterated that the appellate
court cannot reassess the evidence or substitute its own view on the
merits of the dispute, and may interfere only where the Section 34
Court has exceeded or failed to exercise the jurisdiction vested in it.
The relevant observations in Punjab State Civil Supplies Corpn. Ltd.
22
v. Sanman Rice Mills are as follows:
“20. In view of the above position in law on the subject, the scope of
the intervention of the court in arbitral matters is virtually
prohibited, if not absolutely barred and that the interference is
confined only to the extent envisaged under Section 34 of the Act.
The appellate power of Section 37 of the Act is limited within the
domain of Section 34 of the Act. It is exercisable only to find out if
the court, exercising power under Section 34 of the Act, has acted
within its limits as prescribed thereunder or has exceeded or failed to
exercise the power so conferred. The Appellate Court has no
authority of law to consider the matter in dispute before the arbitral
tribunal on merits so as to find out as to whether the decision of the
arbitral tribunal is right or wrong upon reappraisal of evidence as if
it is sitting in an ordinary court of appeal. It is only where the court
exercising power under Section 34 has failed to exercise its
jurisdiction vested in it by Section 34 or has travelled beyond its
jurisdiction that the appellate court can step in and set aside the
order passed under Section 34 of the Act. Its power is more akin to
that superintendence as is vested in civil courts while exercising
revisionary powers. The arbitral award is not liable to be interfered
unless a case for interference as set out in the earlier part of the
decision, is made out. It cannot be disturbed only for the reason that
instead of the view taken by the arbitral tribunal, the other view which
is also a possible view is a better view according to the appellate
court.”
( Emphasis supplied )
21. The same distinction between the limited jurisdiction under
Section 34 and the still narrower appellate jurisdiction under Section
22
2024 SCC OnLine SC 2632
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37 was affirmed by the three-Judge Bench of the Supreme Court in
23
UHL Power Co. Limited v. State of Himachal Pradesh . The Court
observed:
“15. This Court also accepts as correct, the view expressed by the
appellate court that the learned Single Judge committed a gross error
in reappreciating the findings returned by the Arbitral Tribunal and
taking an entirely different view in respect of the interpretation of the
relevant clauses of the implementation agreement governing the
parties inasmuch as it was not open to the said court to do so in
proceedings Under Section 34 of the Arbitration Act, by virtually
acting as a court of appeal.
16. As it is, the jurisdiction conferred on courts Under Section 34 of
the Arbitration Act is fairly narrow, when it comes to the scope of an
appeal Under Section 37 of the Arbitration Act, the jurisdiction of an
appellate court in examining an order, setting aside or refusing to set
aside an award, is all the more circumscribed. ”
( Emphasis supplied )
24
22. In McDermott International Inc. v. Burn Standard Co. Ltd. ,
the Supreme Court also explained that the supervisory role of the
Court in arbitral matters is intended to ensure fairness, and not to
correct errors by substituting its own interpretation of the contract for
that of the Tribunal. The relevant extracts, including the observations
on the construction of contracts and the relevance of the parties‟
conduct and correspondence, are reproduced below:
“ 52. The 1996 Act makes provision for the supervisory role of courts,
for the review of the arbitral award only to ensure fairness.
Intervention of the court is envisaged in few circumstances only,
like, in case of fraud or bias by the arbitrators, violation of natural
justice, etc. The court cannot correct errors of the arbitrators. It can
only quash the award leaving the parties free to begin the arbitration
again if it is desired. So, the scheme of the provision aims at keeping
the supervisory role of the court at minimum level and this can be
justified as parties to the agreement make a conscious decision to
exclude the court's jurisdiction by opting for arbitration as they
prefer the expediency and finality offered by it .
*
23
(2022) 4 SCC 116
24
(2006) 11 SCC 181.
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112. It is trite that the terms of the contract can be express or implied.
The conduct of the parties would also be a relevant factor in the
matter of construction of a contract. The construction of the contract
agreement is within the jurisdiction of the arbitrators having regard to
the wide nature, scope and ambit of the arbitration agreement and
they cannot be said to have misdirected themselves in passing the
award by taking into consideration the conduct of the parties. It is also
trite that correspondences exchanged by the parties are required to be
taken into consideration for the purpose of construction of a contract.
Interpretation of a contract is a matter for the arbitrator to determine,
even if it gives rise to determination of a question of law. (See Pure
Helium India (P) Ltd. v. ONGC [(2003) 8 SCC 593] and D.D.
Sharma v. Union of India [(2004) 5 SCC 325] .)
113. Once, thus, it is held that the arbitrator had the jurisdiction, no
further question shall be raised and the court will not exercise its
jurisdiction unless it is found that there exists any bar on the face of
the award.
114. The above principles have been reiterated in Chairman and MD,
NTPC Ltd. v. Reshmi Constructions, Builders & Contractors [(2004) 2
SCC 663] , Union of India v. Banwari Lal & Sons (P) Ltd. [(2004) 5
SCC 304] , Continental Construction Ltd. v. State of U.P. [(2003) 8
SCC 4] and State of U.P. v. Allied Constructions [(2003) 7 SCC 396]
.”
(Emphasis supplied)
23. The above principles have consistently been followed by the
Supreme Court in several decisions, including Vedanta Ltd. v.
25
Shenzhen Shandong Nuclear Power Construction Co. Ltd. , ONGC
26
Ltd. v. Western Geco International Ltd. , Numaligarh Refinery Ltd.
27
v. Daelim Industrial Co. Ltd. , Tata Hydro-Electric Power Supply
28
Co. Ltd. v. Union of India , Ssangyong Engineering (supra) and
29
NHAI v. M. Hakeem .
24. The aforesaid decisions establish that the jurisdiction under
Section 37, though appellate in nature, remains confined within the
25
(2019) 11 SCC 465.
26
(2014) 9 SCC 263.
27
(2007) 8 SCC 466.
28
(2003) 4 SCC 172.
29
(2021) 9 SCC 1.
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limits prescribed by Section 34. This Court must, therefore, examine
whether the learned Single Judge applied the correct statutory
standard and whether the grounds urged by MIAL disclose any error
warranting interference with the decision to uphold the Award. The
Court cannot undertake a fresh assessment of the merits merely
because another interpretation of the contractual provisions or the
evidence may be possible. At the same time, the limited nature of
appellate scrutiny does not preclude interference where the learned
Single Judge has failed to exercise the jurisdiction vested in the Court
under Section 34 or has exercised it contrary to the governing
statutory standard.
25. Keeping in view the aforementioned legal framework, this
Court now adverts to the issues in the present case. The first issue that
arises for consideration is whether the Impugned Judgment is liable to
be set aside on the ground that the learned Single Judge has
substantially reproduced portions of the Award. In addressing this
objection, it is necessary to distinguish between an order that does not
furnish elaborate reasons and one that fails to disclose any meaningful
adjudication of the controversy. The two cannot be treated as
interchangeable. The adequacy of reasons must be assessed having
regard to the nature of the proceedings, the grounds urged, and the
conclusions reached. An order does not become non-speaking merely
because its reasoning is brief or because the court has adopted the
reasoning contained in the decision under challenge.
26. The requirement that a court must apply its mind to the
controversy does not entail that it must formulate an entirely
independent set of reasons in its own words, irrespective of the
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reasoning already available on record. Where a court examines the
challenge before it and finds the reasoning of the decision under
challenge to be legally sustainable, it may adopt that reasoning as the
basis for its conclusion. Such adoption may be expressed by
reproducing the relevant reasoning, referring to it, or expressly
agreeing with it. The form in which the court conveys its agreement is
not, by itself, determinative of the validity of the order. What matters
is whether the judgment, read as a whole, demonstrates that the court
has considered the controversy in the light of the applicable legal
principles.
27. The reproduction of reasons must, therefore, be distinguished
from the mechanical reproduction of a decision without adjudication
of the objections raised against it. In the former situation, the court
adopts reasoning which it considers sufficient to dispose of the
challenge. In the latter, the court merely sets out the reasoning of the
decision under challenge without examining whether it answers the
grounds urged against it. The distinction lies not in the extent of
textual reproduction, but in the existence or absence of judicial
engagement with the controversy. Consequently, the mere
circumstance that substantial portions of an arbitral award have been
reproduced in a judgment does not, without more, establish non-
application of mind.
28. This distinction is particularly relevant in proceedings under
Sections 34 and 37 of the A&C Act. A court exercising jurisdiction
under Section 34 is required to determine whether the challenge falls
within a ground recognised by the statute. It is not required to
undertake a fresh adjudication of the contractual dispute. Where the
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Tribunal has considered the relevant provisions and material on
record, and its conclusion does not attract any ground for interference,
the court may adopt the Tribunal‟s reasoning without restating the
entire analysis in different words.
29. The same principle applies to an appeal under Section 37,
subject to the narrower scope of appellate scrutiny. The appellate
court must determine whether the Section 34 court applied the correct
statutory standard and remained within the limits of its jurisdiction. It
is not required to reassess the merits merely because the judgment
under appeal reproduces portions of the Award.
30. Consequently, a challenge alleging that a judgment is non-
speaking cannot succeed merely by pointing to the reproduction of the
Award. The objection must be assessed in substance, including
whether any material ground of challenge remains unanswered,
whether the applicable statutory test has been applied, and whether the
reasons adopted support the conclusion reached. These considerations
are not an exhaustive checklist. The ultimate inquiry is whether the
judgment discloses meaningful adjudication of the challenge.
31. This principle does not permit mechanical endorsement of an
Award. If the Section 34 court merely reproduces the Award without
examining a material objection, or if the reasoning adopted fails to
answer the challenge or rests on a legally untenable premise, the
judgment may remain vulnerable notwithstanding the reproduction of
reasons. Similarly, where the Tribunal has disregarded vital evidence
in a manner attracting a ground under Section 34, the court cannot
avoid examining that deficiency merely by adopting the Award. The
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distinction is between the legitimate adoption of reasoning and the
abdication of the duty to adjudicate.
32. The aforesaid approach is consistent with the principle
recognised by the Co-ordinate Bench of this Court in Proto
Developers and Technologies Ltd. v. M/s Antriksh Realtech Pvt.
30
Ltd. . The decision emphasises that a challenge to the sufficiency or
weight of the evidence considered by the Arbitral Tribunal does not,
by itself, permit reappreciation under Sections 34 or 37. It also
recognises that the question whether a judgment is non-speaking must
be assessed on an overall reading, having regard to the reasoning
disclosed and the statutory standard applied. The relevant extracts of
the same are reproduced hereinbelow:
“40. The challenge of the Appellant is thus, in essence, directed to the
sufficiency and weight of the evidence, which is thus not a case of no
evidence. At best, it constitutes a challenge to the sufficiency of the
material considered by the Tribunal as evidence, which lies within the
exclusive domain of the Arbitral Tribunal and is not open to re-
appreciation under Sections 34 or 37 of the Act.
44. On an overall consideration, the Impugned Judgment discloses
that the learned Single Judge applied the correct test under Section
34, examined the challenge on the touchstone of patent illegality and
perversity, and declined to substitute the Arbitral view with an
alternative interpretation of the contract or the evidence. No
jurisdictional error or misapplication of the settled principles
governing interference with an Arbitral Award has been shown.
45. The contention that the Impugned Judgment is non-speaking is
also without merit. The Impugned Judgment notices the contractual
framework, the nature of the findings returned by the learned
Arbitrator, and records the conclusion that the view taken is a
plausible and justifiable one.”
33. Further, the decision of the High Court of Karnataka in M/s
30
2026 SCC OnLine Del 2842
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31
Strategic Infra Services Pvt. Ltd. v. Mphasis Ltd. , relied upon by
AAI, similarly supports an assessment of the reasons recorded in the
judgment as a whole. These decisions are relevant to the present issue
not because they dispense with the requirement to give reasons, but
because they direct attention to the substance of the adjudication
rather than the form in which it is expressed.
34. The decisions relied upon by MIAL in Ajay Singh (supra) and
Spicejet Limited (supra) underscore the obligation of a court
exercising jurisdiction under Section 34 to consider the grounds of
challenge and furnish reasons for its conclusion. That obligation
cannot be satisfied by a mere recital of the Award where the
objections remain unexamined. However, the requirement of
independent application of mind is distinct from a requirement that
every reason be independently formulated. The question is whether
the court has meaningfully examined the challenge and applied the
statutory standard.
32
35. The decisions in Kalanithi Maran v. Ajay Singh & Anr. and
National Project Constructions Corporation Ltd. v. M/s S.S. Sharma
33
and Company , relied upon by MIAL, must likewise be considered in
the context of the deficiencies identified in those cases. Where the
objections have not been meaningfully examined and the applicable
statutory test has not been applied, interference may be warranted.
They do not, however, justify treating reproduction of an Award as
conclusive proof of non-application of mind. The controlling
consideration remains whether the judgment, read as a whole,
31
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33
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discloses meaningful adjudication of the grounds raised.
36. Tested against the aforesaid principles, the Impugned Judgment
cannot be characterised as non-speaking merely because it reproduces
portions of the Award. The learned Single Judge recorded MIAL‟s
submissions, considered the relevant provisions of the OMDA and the
MIAL Lease Deed, addressed the contention based on Article 20.3.2,
and examined the Tribunal‟s interpretation of the contractual
provisions. The reproduction of portions of the Award formed part of
that discussion and does not, by itself, establish that the learned Single
Judge failed to apply his mind to the challenge.
37. The learned Single Judge could, however, have dealt more
expressly with the evidentiary significance attributed by MIAL to the
letter dated 09.06.2006 and the subsequent rent payments. The
adequacy of the reasoning on these matters must be distinguished
from the objection to the form of the judgment. Whether the treatment
of this material discloses a failure to exercise jurisdiction under
Section 34 depends on its relevance to the grounds of challenge and
on whether the Award‟s treatment of the same material attracts any
statutory ground for interference.
38. The objection that the Impugned Judgment is non-speaking
merely because it reproduces portions of the Award is, accordingly,
rejected. The specific objections concerning contractual interpretation,
the letter dated 09.06.2006, the rent payments and the communications
issued by the MoCA must nevertheless be examined on their own
merits to determine whether the decision to uphold the Award falls
within the limits of Section 34.
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39. Turning to the contractual interpretation, Article 2.6.1 of the
OMDA excludes from the land to be demised to MIAL the land
granted to third parties under Existing Leases. Articles 2.1.1 and 2.1.2
of the MIAL Lease Deed reflect the same arrangement and provide
that the land covered by an Existing Lease would form part of the
Demised Premises only upon expiry or early termination of that lease.
These provisions establish that the underlying land was not to be
included in the demise to MIAL while the relevant Existing Lease
continued to subsist. However, the question whether AAI was
separately obliged to transfer or novate its interest as lessor under such
a lease must be examined with reference to Article 5.2(b)(i) of the
OMDA and cannot be answered solely by reference to the provisions
governing the demise of land.
40. Article 5.2(b)(i) addresses existing contracts and agreements
between AAI and third parties relating to the Airport. It contemplates
that MIAL would use its best efforts and AAI would render
reasonable assistance towards their transfer or novation during the
Transition Phase. It further provides for MIAL to perform, at its own
risk and cost, contracts which could not be specifically novated, with
the benefits arising from such contracts vesting in MIAL. The
provision must, therefore, be examined not only for the obligation to
transfer or novate contracts, but also for the consequences
contemplated where specific novation is not possible. Whether the
Sahara Lease falls within the scope of this arrangement, and whether
the provision encompasses the transfer of AAI‟s interest as lessor, are
the questions requiring determination.
41. MIAL‟s submission that the two sets of provisions operate in
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different fields is not without force. Article 2.6 concerns the demise of
land to MIAL, whereas Article 5.2(b)(i) concerns the transfer or
novation of contracts. The exclusion of the land under the Sahara
Lease from the Demised Premises does not, as a matter of language
alone, necessarily answer whether AAI‟s lessor‟s interest under that
lease could be transferred separately. The Tribunal itself
acknowledged that Article 5.2(b)(i), if read in isolation, could bear the
interpretation advanced by MIAL.
42. The question is not whether MIAL‟s construction is arguable,
but whether the Tribunal‟s contrary construction is so unreasonable as
to attract interference under Section 34. The Tribunal read Article
5.2(b)(i) in conjunction with the provisions governing Existing Leases
and the Demised Premises. Its reasoning appears to proceed on the
basis that the specific arrangement excluding land under Existing
Leases from the demise must inform the interpretation of the general
provision concerning the transfer or novation of existing contracts.
That approach is not, in itself, impermissible. However, the exclusion
of the underlying land from the demise cannot automatically be
treated as excluding the lessor‟s contractual interest from the
operation of Article 5.2(b)(i). The sustainability of the Tribunal‟s
interpretation must be assessed by examining whether the contractual
provisions, read together, reasonably support that further conclusion.
43. The definition of Existing Leases, their inclusion in Schedule
28, and their exclusion from the Demised Premises provide contextual
support for the Tribunal‟s interpretation. The specific provisions
governing the demise of land must be read harmoniously with the
general provision concerning existing contracts and agreements. At
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the same time, the fact that an Existing Lease is excluded from the
Demised Premises does not, without further analysis, establish that the
benefits arising from that lease are also excluded from Article
5.2(b)(i). The decisive question is whether the contractual scheme,
read as a whole, supports the Tribunal‟s construction of the expression
“such contracts” and its application to the Sahara Lease.
44. MIAL‟s contention that Article 5.2(b)(i) contains no express
exception for Existing Leases must be considered in that context. The
absence of an express exception is not conclusive, since contractual
provisions must be read together rather than in isolation. Equally, a
court cannot introduce an exclusion that the contract, properly
construed, does not support. The Tribunal‟s interpretation can be
sustained only if it represents a plausible reconciliation of the general
provision concerning existing contracts with the specific provisions
governing Existing Leases. The question is not whether another
interpretation is possible, but whether the interpretation adopted falls
outside the range of permissible contractual constructions.
45. Article 20.3.2 of the OMDA does not, by itself, resolve the
present dispute. The provision addresses a conflict between the
OMDA and a project agreement, whereas the principal controversy
concerns the construction of different provisions of the OMDA, read
with the MIAL Lease Deed. It does not prescribe how the provisions
of the OMDA are to be reconciled with one another. The learned
Single Judge was, therefore, justified in declining to treat Article
20.3.2 as determinative of the dispute.
46. The observation of the learned Single Judge that there was no
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clause dealing with the benefits arising from Existing Leases requires
qualification. Article 5.2(b)(i) expressly provides that the benefits
arising from the contracts covered by that provision would vest in
MIAL. The dispute is whether the Sahara Lease falls within that
expression. Accordingly, the existence of the benefits clause cannot be
overlooked. The question is one of its scope and application. The
conclusion that the Award does not warrant interference must,
therefore, rest on the Tribunal‟s construction of the category of
contracts covered by Article 5.2(b)(i), and not on the absence of a
contractual provision concerning benefits.
47. The Award‟s treatment of MIAL‟s submission that the
provisions concern distinct interests, the demise of land on the one
hand and the transfer of the lessor‟s interest on the other, is not
elaborate. Nevertheless, if the Award is read as a whole, the
Tribunal‟s reasoning must be assessed by reference to the contractual
framework it considered and the basis on which it treated the specific
provisions governing Existing Leases as controlling. The absence of a
separate answer to every step of MIAL‟s argument does not, by itself,
establish patent illegality. However, the distinction between the
demise of land and the transfer of the lessor‟s interest remains
material, and the conclusion must be sustainable on the contractual
provisions actually considered by the Tribunal rather than on an
assumption that the two interests are identical.
48. Section 109 of the TPA does not by itself establish the
contractual obligation asserted by MIAL. The provision concerns the
rights and liabilities arising upon transfer of the lessor‟s interest in the
leased property. The question in the present case is anterior: whether,
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on a proper construction of the OMDA, AAI was obliged to transfer
or novate its interest as lessor under the Sahara Lease. The statutory
consequences of a transfer cannot, without more, establish that the
parties had contractually undertaken to effect such a transfer. The
reliance on Section 109 must, therefore, be considered in conjunction
with, and not as a substitute for, the construction of the relevant
contractual provisions.
49. It is also necessary to distinguish between the novation of a
contract and the transfer of the lessor‟s interest in the leased property.
The former ordinarily involves the substitution of a contract or a
contracting party in accordance with the applicable legal
requirements, whereas the latter raises the question of the rights that
pass to a transferee of the lessor‟s interest under Section 109 of the
TPA. The fact that the Sahara Lease was not novated does not, by
itself, determine whether the lessor‟s interest could have been
transferred independently. The issue in the present case, however, is
whether such a transfer was contemplated or required by the OMDA,
and whether the Tribunal‟s construction of the contractual provisions
on that question attracts any ground for interference under Section 34.
50. MIAL relies upon the communications issued by the MoCA and
the legal opinions referred to therein to contend that the proposed
transfer of the Sahara Lease was supported by the policy framework
governing the privatisation of the Airport. It further submits that these
communications constituted directions on a question of policy within
the meaning of Section 40 of the AAI Act. The mere fact that the
OMDA is a bilateral contract would not, by itself, answer a contention
that a binding statutory direction was issued under Section 40. The
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nature and legal effect of the communications must be assessed with
reference to the statutory provision and the contents of the
communications themselves.
51. The Tribunal considered the communications and concluded
that they did not constitute policy directions under Section 40, but
reflected views concerning the interpretation and implementation of
the contractual arrangements. The question before this Court is
whether that conclusion is so legally untenable or perverse as to attract
interference under Section 34. The fact that the Ministry was involved
in the policy process leading to the privatisation of the Airport does
not, by itself, establish that every subsequent communication or legal
opinion constituted a binding direction. In the absence of a
demonstrated statutory direction having been disregarded, the
communications do not, merely by expressing a particular
understanding of the transaction, establish a ground for setting aside
the Award. This conclusion is confined to the grounds raised in the
present arbitral challenge and does not determine any independent
public-law issue that may arise concerning the legal effect of a
direction validly issued under Section 40.
52. The Tribunal referred to AAI‟s letter dated 09.06.2006 and
reproduced a portion of it in the Award. However, it did not separately
analyse the precise statement on which MIAL relies, and the learned
Single Judge could have dealt with this objection more expressly. The
relevant question is whether the omission to discuss that statement
separately amounts to a disregard of material evidence warranting
interference under Section 34, or whether the Award, read as a whole,
discloses a sustainable basis for the conclusion reached.
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53. The letter records AAI‟s understanding that existing
commercial and land licence/lease agreements were required to be
assigned or novated to the JVC during the Transition Phase. It is,
therefore, relevant to MIAL‟s contention that Article 5.2(b)(i)
contemplated a transfer of the lessor‟s interest under the Sahara Lease.
At the same time, the letter is a post-contractual communication and
cannot, by itself, amend the terms of the OMDA. Its significance must
be assessed in conjunction with the contractual provisions that govern
the scope and manner of the contemplated transfer.
54. The fact that the letter refers to assignment or novation during
the Transition Phase does not, by itself, resolve the dispute. The
absence of an automatic transfer is distinct from the question whether
AAI was contractually obliged to take steps to effect a transfer. The
relevant inquiry is whether the letter, considered with the contractual
scheme and the reasons recorded in the Award, renders the Tribunal‟s
interpretation legally unsustainable. The omission to discuss every
sentence of a document separately is not sufficient to establish patent
illegality. However, the materiality of the omitted consideration must
be assessed rather than presumed away.
55. MIAL also relies upon the payments made by AAI to MIAL for
approximately ten years. The Award noticed that AAI had passed on
the lease amounts to MIAL until 2019, although it considered that
conduct while dealing with limitation and did not separately examine
whether the payments supported MIAL‟s interpretation of Article
5.2(b)(i). The evidentiary significance of this conduct must, therefore,
be considered in the context of the contractual dispute.
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56. The payments are relevant to the extent that they may indicate
the manner in which the parties implemented or understood the
arrangement concerning the Sahara Lease. However, the fact that AAI
passed on the amounts in question does not, by itself, establish that the
lessor‟s interest stood transferred to MIAL. Nor does it conclusively
establish that Article 5.2(b)(i) required such a transfer. The weight to
be attached to the payments depends upon the circumstances in which
they were made, the arrangement under which they were passed on,
and their consistency with the contractual provisions.
57. AAI has contended that no plea of acquiescence, waiver or
estoppel was advanced before the Tribunal. In the absence of such a
plea having been adjudicated, this Court need not determine the
dispute on those independent grounds. The payments must instead be
considered for their evidentiary relevance to the contractual
interpretation advanced by MIAL. The question is whether the
Tribunal‟s failure to analyse that relevance separately renders its
conclusion perverse or otherwise attracts a ground for interference
under Section 34. That question must be answered by reference to the
materiality of the payments and the reasoning of the Award as a
whole, rather than by treating the absence of an automatic transfer as
conclusive.
58. The minutes of the Inter-Ministerial Group meeting dated
18.10.2004 recorded a recommendation that the Sahara Lease be
assigned to the JVC. The minutes predate the execution of the OMDA
and may be relevant to the background and commercial context of the
transaction. However, the contractual rights and obligations
enforceable between MIAL and AAI must ultimately be determined
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from the agreements executed by them, read in the light of the
surrounding circumstances to the extent permissible in construing
those agreements. The minutes do not, by themselves, establish that
the parties incorporated the recommendation into a binding
contractual obligation. The Tribunal‟s reliance on the executed
agreements, therefore, does not warrant interference merely because
the earlier recommendation contemplated an assignment.
CONCLUSION:
59. For the reasons stated above, this Court finds no ground to
interfere with the Impugned Judgment merely because it reproduces
portions of the Award. The Tribunal‟s interpretation of the contractual
provisions must be assessed within the limited scope of Section 34,
and the evidentiary objections raised by MIAL must be examined by
reference to their materiality and the effect of the alleged omissions on
the conclusions reached. For the reasons recorded hereinabove, and
subject to the foregoing examination of the contractual provisions and
the material relied upon by MIAL, no ground for interference by the
Court exercising jurisdiction under Section 34 has been established.
60. Consequently, the present Appeal is dismissed.
ANIL KSHETARPAL, J.
BHARAT PARASHAR, J.
OCTOBER 16, 2026
sp/shahid
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