MUMBAI INTERNATIONAL AIRPORT LIMITED vs AIRPORTS AUTHORITY OF INDIA

$~25
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 268/2023
MUMBAI INTERNATIONAL AIRPORT LIMITED….. Petitioner
Through: Mr. Rajiv Nayar, Sr. Adv., Mr. Ankur Chawla, Mr. Akshay Ringe, Ms. Kanika Singh, Ms. Kanika Singh, Ms. Prema Mahajan, Mr. Saurabh Seth, Advs.

versus

AIRPORTS AUTHORITY OF INDIA ….. Respondent
Through: Mr. Raghav Shankar, Mr. Karan Lahiri, Mr. Prateek Arora, Mr. Anubhab Atreya, Mr. Zahid Laiq Ahmed, Ms. Pallavi Mishra, Ms. Rishieka Ray, Advs.

% Date of Decision: 10.04.2024.

CORAM:
HON’BLE MR. JUSTICE DINESH KUMAR SHARMA

J U D G M E N T

DINESH KUMAR SHARMA, J. (Oral)
1. The present petition has been filed under Section 34 of the Arbitration and Conciliation Act on behalf of the petitioner against an award dated 23.03.2023 passed by the learned Arbitral Tribunal.
2. Sh. Rajiv Nayar, learned senior counsel for the petitioner submits that the dispute arises from a Lease Agreement executed on 05.06.2002 between the Respondent (AAI) and Sahara Hospitality Private Limited, concerning land at Chhatrapati Shivaji Maharaj International Airport. Subsequently, the operation, management, and development of Mumbai Airport was transferred to Petitioner, through an Operation, Management, and Development Agreement (OMDA) executed on 04.04.2006 having effective date of 03.05.2006.
3. It is submitted that the crux of the dispute lies in the Respondent’s alleged failure to transfer the Sahara Lease to the Petitioner as required under the OMDA. Moreover, it is submitted that this failure led to the invocation of arbitration, culminating in the impugned Arbitral Award.
4. Sh. Rajiv Nayar, learned senior counsel for the petitioner has submitted that learned Arbitral Tribunal has given a wrong conclusion that Clause-5.2 will yield to Clause-2.6 of the OMDA. Learned senior counsel submits that it amounts to the re-construction of the covenants which is not permissible. Learned senior counsel for the plaintiff submits that thirdly, by holding that Existing Leases do not fall under the scope of clause 5.2 of the OMDA, the Arbitral Tribunal has read additional words into the contract which do not exist and has thus rewritten the contractual scheme which did not include such exceptions. Learned senior counsel has relied upon South East Asia Marine Engineering and Construction Limited vs. Oil India Limited1. Learned senior counsel submitted that Clause 2.6 of OMDA & Articles 2.1.1 and 2.1.2 of the Sahara Lease Deed and Clause 5.2(b)(i) of the OMDA are not in conflict with each other and operate in different spheres. It is submitted that the petitioner is given the status of a Lessee under Clause 2.6 of OMDA & Article 2.1.1 and 2.1.2 of Lease Deed which provide for the transfer of interests in the land i.e. by way of a “Demise” to the Petitioner i.e. creation of Lessee’s interests. It is submitted that Petitioner’s status was that of stepping into the shoes of the Lessor in accordance with Clause 5.2(b)(i) of OMDA which provides for a transfer of Lessor’s rights under a lease agreement with a Third party. It is further submitted that in case of novation/transfer, consent of Lessee is not needed as held in the case of Mohar Singh (Dead) by LRs vs Devi Charan2 and Shankaramma vs Mohammed Abdul Hameed.3 Moreover, it has been submitted that since the same land could not be demised twice, the petitioner was seeking the transfer of lessor’s interests only as they had assumed the Respondent’s obligations from the “effective date” and thus, would be entitled the rights of the Respondent under the Existing Leases and agreements.
5. Learned senior counsel for the petitioner has further submitted that there are certain vital evidence that have allegedly not been dealt with by the learned Arbitrator i.e. notably a letter from the Respondent dated 09.06.2006, which purportedly indicated the transfer of existing leases to the Petitioner, and the same was overlooked by the Arbitrator. It is submitted that though the communication has been noted, however the Arbitrator failed to give any finding qua the same and thus, this constitutes a valid ground for setting aside the award. It is submitted that the second pivotal evidence that has not been considered by the Arbitral Award is the Respondent’s conduct of transferring rent and benefits under the Sahara Lease Agreement for nearly ten years. It is submitted that this conduct was vital evidence of the fact that the Respondent itself considered that the Petitioner’s (As lessor) is entitled to the benefits under the Sahara Lease and the same were to come to the Petitioner and, therefore, the lease was to be transferred to the Petitioner itself. Reliance has been placed upon Ssangyong Engg. & Construction Co. Ltd. v. NHAI4 and United India Insurance Co. Ltd. v. Shreedhar Malik Foods Ltd.5
6. Sh. Rajiv Nayar, learned senior counsel for the petitioner has summarized arguments into the following four points:
i.) Clause 5.2 of the OMDA is an omnibus clause which specifically provides that all existing contracts and agreements between AAI and any third party as relatable to the airport shall be transferred/novated. Learned senior counsel submits that clause-5.2(b)(i) does not speak about exclusion of any “existing leases”;
ii.) Learned senior counsel has further submitted that there are repeated communications/directives of Ministry of Civil Aviation asking the AAI i.e., the respondent to novate all the existing leases in favour of the petitioner;
iii.) Learned senior counsel has further submitted that the premises leased out to M/s Sahara Hospitality Private Limited by AAI is valid till 2031 and therefore, since a premises cannot be leased twice; the same was not leased in favour of petitioner; and
iv.) The learned Arbitral Tribunal has not considered a very material evidence in the form of letter dated 09.06.2006. It is submitted that though the communication has been noted, however the learned Arbitral Tribunal failed to give any finding qua the same and such non-consideration makes the award perverse in view of the judgment in Ssangyong Engineering and Construction6.
7. Sh. Raghav Shankar, learned counsel for the respondent has submitted that the Sahara Lease Deed, executed on 05.06.2002, granted Sahara Hospitality Private Limited a lease of land at Chhatrapati Shivaji International Airport until 04.06.2031. It is submitted that the OMDA, executed on 04.04.2006, entered into between the parties herein, granted petitioner the exclusive right to operate, maintain, and develop Mumbai Airport. As part of the Grant of Function under the OMDA, respondent agreed to demise certain land to petitioner and, Article 2.6.1 of the OMDA provided that the demise would not include certain lands, which were the subject matter of ‘Existing Leases’. It is further submitted that the phrase ‘Existing Leases’ is specifically defined in the OMDA as meaning “leases presently valid and subsisting for any portion of the Airport, entered into between AAI and various third parties, details of which are set out in Schedule 28 appended hereto;” Learned counsel submitted that the lease to which the present proceedings relate – the Sahara Lease Deed is an ‘Existing Lease’ is included in Schedule 28.
8. Learned counsel for the respondent submitted that the Arbitral Tribunal correctly interpreted the OMDA and the Lease Deed and arrived at the conclusion that MIAL lacked a contractual right to demand the transfer of the Sahara Lease Deed. It is further submitted that Article 2.6.1 of the OMDA and Articles 2.1.1/2.1.2 of the Lease Deed clearly delineate the scope of the “Demised Premises” and exclude “Existing Leases” until their expiry/termination. It is submitted that Article 2.6 of the OMDA & Article 2.1.1 & 2.1.2 of the Lease Deed being more specific clauses dealing with defined terms i.e., “Demised Premises” and “Existing Lease” shall override the general phrase “all existing contracts and agreements” contemplated in Article 5.2(b)(i) of the OMDA.
9. Sh. Raghav Shankar, learned counsel for the respondent submits that MIAL’s contention that the Tribunal overlooked crucial evidence, specifically a letter dated 09.06.2006, is unsubstantiated. The Tribunal duly considered all relevant evidence and its construction of the letter was reasonable. Moreover, MIAL’s attempt to invite the court to re-appreciate evidence is impermissible under Section 34. Learned counsel submits that when it comes to the appreciation of the evidence, the opinion of the learned Arbitral Tribunal is the final adjudication. It is submitted that re-appreciation of evidence is impermissible under Section 34. It is submitted that the Tribunal’s decision was based on a valid interpretation of the contract, and there is no ground for setting aside the Award under Section 34. It is submitted that the challenge to an arbitral award under Section 34 must satisfy the tests as have been laid down by the provisions of the Act, and the established precedents and the same have not been fulfilled. Reliance in this regard has been placed upon Reliance Infrastructure Ltd .v. State of Goa7, UHL Power Co. Ltd. v. State of H.P.8, Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation Ltd9., MMTC Ltd. v. Vedanta Ltd.10, K. Sugumar v. Hindustan Petroleum Corpn. Ltd11., Associate Builders v. Delhi Development Authority12; Ssangyong Engg. & Construction Co. Ltd. v. NHAI13, Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.14
10. Sh. Raghav Shankar, learned counsel for AAI i.e. respondent has summarized his arguments as follows:
i.) Clauses of OMDA and lease deed specifically excludes “existing leases”;
ii.) Clause-5.2 of the OMDA will not be applicable as it only relates to the existing contracts and agreements and not the existing leases;
iii.) Clause-2.6.1 of OMDA and 2.1.2 of the lease deed specifically excludes the “existing leases” as given in the Schedule-28. It is submitted that as part of the Grant of Function under the OMDA, respondent agreed to demise certain land to petitioner and, Article 2.6.1 of the OMDA provided that the demise would not include certain lands, which were the subject matter of ‘Existing Leases’. It is further submitted that the phrase ‘Existing Leases’ is specifically defined in the OMDA as meaning “leases presently valid and subsisting for any portion of the Airport, entered into between AAI and various third parties, details of which are set out in Schedule 28 appended hereto;” Learned counsel submitted that the lease to which the present proceedings relate, the Sahara Lease Deed, is an ‘Existing Lease’ is included in Schedule 28; and
iv.) The communications from Ministry of Civil Aviation contained mere advise which were in the favour of the respondent as well as against the petitioner.
11. The Bare perusal of the scheme of Arbitration and Conciliation Act, 1996 indicates that the scope and ambit of challenging an arbitral award and the jurisdiction of this court as provided under Section 34 of the Arbitration and Conciliation Act is limited. Section 34 in conjunction with Section 5 makes it clear that an arbitral award that is governed by part I of the Arbitration and Conciliation Act, 1996 can be set aside only on limited grounds provided in the Act and not otherwise. The intention of the legislature is crystal clear in Section 5 which reads as follows:
“5. Extent of judicial intervention.—Not withstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.”

12. In The balance of interest lies in minimizing judicial intervention which upholds the intention with which the said Act was passed. Reliance can be placed on Associate Builders vs. DDA15, wherein it was inter-alia held as under:
“12……..It is important to note that the 1996 Act was enacted to replace the 1940 Arbitration Act in order to provide for an arbitral procedure which is fair, efficient and capable of meeting the needs of arbitration; also to provide that the tribunal gives reasons for an arbitral award; to ensure that the tribunal remains within the limits of its jurisdiction; and to minimize the supervisory roles of courts in the arbitral process.”

13. It is trite law that the Court cannot sit in appeal over the arbitral award and re-examine the merits. It is further not permissible to re-appreciate the evidence on record. This principle is succinctly outlined in numerous cases. The Supreme Court in PSA SICAL Terminals (P)Ltd. v. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin16, inter-alia held that:
“43. It will thus appear to be a more than settled legal position, that in an application under Section 34, the court is not expected to act as an appellate court and re-appreciate the evidence. The scope of interference would be limited to grounds provided under Section 34 of the Arbitration Act. The interference would be so warranted when the award is in violation of “public policy of India”, which has been held to mean “the fundamental policy of Indian law”. A judicial intervention on account of interfering on the merits of the award would not be permissible. However, the principles of natural justice as contained in Section 18 and 34(2)(a)(iii) of the Arbitration Act would continue to be the grounds of challenge of an award. The ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. It is only such arbitral awards that shock the conscience of the court, that can be set aside on the said ground. An award would be set aside on the ground of patent illegality appearing on the face of the award and as such, which goes to the roots of the matter. However, an illegality with regard to a mere erroneous application of law would not be a ground for interference. Equally, reappreciation of evidence would not be permissible on the ground of patent illegality appearing on the face of the award.”
14. In MMTC Ltd. v. Vedanta Ltd.17 the court laid down the reason for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act was emphasized upon held as under
“11.As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the “fundamental policy of Indian law” would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury Associated Provincial Picture Houses v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, “patent illegality” itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.”

15. Further, in K. Sugumar v. Hindustan Petroleum Corpn. Ltd.18, it has been observed as follows:
“2. The contours of the power of the Court under Section 34 of the Act are too well established to require any reiteration. Even a bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an alternate mechanism for dispute resolution, they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by the arbitrator which can find manifestation in different forms including exercise of legal perversity by the arbitrator.”

16. It is pertinent to reiterate that the intention of the legislature while enacting the Act, 1996 was the expeditious and effective disposal of matters. The Act has been set forth with an intention to limit the interference of the courts into the arbitral proceedings. As it is made clear that the Court does not sit in appeal over the arbitral award, the power exercised by this Court under Section 34 is limited. There can neither be any re-appreciation of evidence nor roving enquiry into the merits of the case undertaken. It is a settled preposition that the award will not be set aside if the tribunal has made a mistake of law or if the court takes another view of the evidence. An award under the Arbitration Act can only be set aside if it is found to be contrary to the fundamental policy of Indian Law, interest of country, justice or morality or if it is patently illegal, thereby once again providing clarity on the ambit of public policy. Therefore, the court must limit itself to checking whether the impugned arbitral award violated the “public policy of India,” or is against the principles of natural justice/ “most basic notions of morality or justice” or whether there exists any patent illegality in the same. The notion of the “public policy of India” has been contemplated in ONGC Ltd. v. Western Geco International Ltd.,19 and has been held to mean the following:
“35. What then would constitute the “fundamental policy of Indian law” is the question. The decision in ONGC [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] does not elaborate that aspect. Even so, the expression must, in our opinion, include all such fundamental principles as providing a basis for administration of justice and enforcement of law in this country. Without meaning to exhaustively enumerate the purport of the expression “fundamental policy of Indian law”, we may refer to three distinct and fundamental juristic principles that must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a court or other authority that affects the rights of a citizen or leads to any civil consequences, the court or authority concerned is bound to adopt what is in legal parlance called a “judicial approach” in the matter. The duty to adopt a judicial approach arises from the very nature of the power exercised by the court or the authority does not have to be separately or additionally enjoined upon the fora concerned. What must be remembered is that the importance of a judicial approach in judicial and quasi-judicial determination lies in the fact that so long as the court, tribunal or the authority exercising powers that affect the rights or obligations of the parties before them shows fidelity to judicial approach, they cannot act in an arbitrary, capricious or whimsical manner. Judicial approach ensures that the authority acts bona fide and deals with the subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. Judicial approach in that sense acts as a check against flaws and faults that can render the decision of a court, tribunal or authority vulnerable to challenge.
xxx
38. Equally important and indeed fundamental to the policy of Indian law is the principle that a court and so also a quasi-judicial authority must, while determining the rights and obligations of parties before it, do so in accordance with the principles of natural justice. Besides the celebrated audi alteram partem rule one of the facets of the principles of natural justice is that the court/authority deciding the matter must apply its mind to the attendant facts and circumstances while taking a view one way or the other. Non-application of mind is a defect that is fatal to any adjudication. Application of mind is best demonstrated by disclosure of the mind and disclosure of mind is best done by recording reasons in support of the decision which the court or authority is taking. The requirement that an adjudicatory authority must apply its mind is, in that view, so deeply embedded in our jurisprudence that it can be described as a fundamental policy of Indian law.”

17. While navigating the parameters for setting aside an Arbitral Award, referring to the provision of Section 34 of the Arbitration Act interpreted in McDermott International INC. v. Burn Standard Co. Ltd.,20 the Supreme Court inter-alia held that the public policy violation, indisputably, should be so unfair and unreasonable as to shock the conscience of the court. The award challenged reveals that the arbitrator has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute.
18. The court’s jurisdiction also extends to undertaking an examination of the impugned award to check for any ‘perversity’ where under and the same may be covered under the head “patent illegality” under Section 34(2A). The expression ‘perverse’ refers to where the award is either not supported by any evidence on record, is against the law, suffers from any procedural irregularity or is such that it has ignored some pivotal evidence.21 In Ssangyong Engineering and Construction Company22, it was inter alia held that the concept of ‘illegality’ must appear on the face of the Award and that it must go to the root of the matter, and ought not to be a mere erroneous application of the law. Moreover, the Award would be considered ‘patently illegal’ if an Arbitrator gives no reasons for an Award and wanders outside the purview of contract and deals with matters not allotted to him. “Patent illegality” also refers to where a decision is so irrational that no reasonable person would have arrived at the same or a finding so outrageously defies logic; such that the finding would be rendered infirm in law. Additionally, it also pertains to findings that are arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material.
19. In the present case, it is an admitted case that there is no clause in the OMDA or in the lease deed which speaks to the benefit arising out of the existing leases. Before proceeding further, it is necessary to refer to the relevant clauses of the OMDA and the lease deed. The relevant clauses of the OMDA are 2.1, 2.6.1 and 5.2 and the relevant clauses of the lease deed are 2.1.1 and 2.1.2.
“2.1 Grant of Function
2.2.1. AAI hereby grants to the JVC, the exclusive right and authority during the Term to undertake some of the functions of the AAL 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 operating condition the Airport and to perform services and activities constituting Aeronautical Services and Non-Aeronautical Services (but excluding Reserved Activities) at the Airport, in accordance with the terms and conditions of this Agreement (the “Grant”).
2.1.2. Without prejudice to the aforesaid, AAI recognizes the exclusive right of the JVC during the Term, in accordance with the terms and conditions of this Agreement, to:
(i) develop, finance, design, construct, modernize, operate, maintain, use and regulate the use by third parties of the Airport;
(ii) enjoy complete and uninterrupted possession and control of the Airport Site and the Existing Assets for the purpose of providing Aeronautical Services and Non-Aeronautical Services;
(iii) determine, demand, collect, retain and appropriate charges from the users of the Airport in accordance with Article 12 hereto; and
(iv) Contract and/or sub contract with third parties to undertake functions on behalf of the JVC, and sub-lease and/or license the Demised Premises in accordance with Article 8.5.7.
2.6.1 In consideration of the Lease Rent, this Agreement and the covenants and warranties on the part of the JVC herein, the AAI, in accordance with the AAI Act and the terms and conditions set forth herein, hereby, agrees to demise to the JVC under the Lease Deed, commencing from the Effective Date, all the land (along with any buildings, constructions or immovable assets, if any, thereon) which is described, delineated and shown in the Schedule 25 hereto, other than (i) any lands (along with any buildings, constructions or immovable assets, if any, thereon) granted to any third party under any Existing Lease(s) constituting the Airport on the date hereof, and (ii) any and all of the Carved Out Assets and the underlying land together with any buildings, constructions or immovable assets thereon, on an “as is where is basis” together with all Encumbrances thereto, (hereinafter “Demised Premises”) to hold the said Demised Premises, together with all and singular rights, liberties, privileges, easements and appurtenances whatsoever to the said Demised Premises, hereditaments or premises or any part thereof belonging to or in anyway appurtenant thereto or enjoyed therewith, for the duration of the term hereof or the purposes permitted under this Agreement.
5.2TransitionPhase
(a) The period commencing from Effective Date and terminating three (3) months thereafter shall constitute the Transition Phase. Provided however that in the event the activities proposed to be undertaken during the Transition Phase have not been completed within the abovementioned period of three (3) months, then the Transition Phase shall be extended by an additional period of three (3)months, and in such event, the period commencing from Effective Date and terminating six (6) months thereafter shall constitute the Transition Phase.
(b) During the Transition Phase, the following activities shall take place:
(i) Existing Contracts: The JVC shall take best efforts, and AAI shall render all reasonable assistance, to transfer/novate. AAI under all existing contracts and agreements between AAI and any third party, as relatable to the Airport, with the JVC, on the principle that such transfer/novation would release AAI of all liabilities and obligations under contracts or agreements as arising from and after the Effective Date (except those pertaining to Legacy Matters). The Parties, along with relevant third parties shall execute necessary documentation or put in place necessary arrangements for the aforesaid transfer / novation. The Parties expressly agree that in respect of existing arrangements of Indian Airlines Ltd. and Air India Ltd. for usage of land and/or building at the Airport and Public Sector oil companies in respect of common hydrant infrastructure for aircraft fuelling at the Airport, for which no express written contract has been executed or presently exists, such existing arrangements shall continue for a Period of six(6)months from the Effective Date and the JVC shall during such period mutually agree with Indian Airlines Ltd., Air India Ltd, and Public Sector Oil companies in respect of such arrangements going forward. Provided however that any third party contract that cannot be specifically novated to the JVC for any reason whatsoever shall be performed by the JVC (at its own risk and cost) for and on behalf of AAI (as if the JVC was an original party to the said contracts, in place of AAI).. Provided further that JVC shall indemnify and keep indemnified the AAI against any liability or costs arising under such contracts (including, for the avoidance of doubt, contracts relating to capital works-in-progress included in the list of Mandatory Capital Projects), including specifically, payments due to the counter-parties of such contracts or to any other Entities pursuant to such contracts. Any benefits arising from such contracts shall also vest with JVC. Nothing contained in this Article 5.2(b)
(i) shall prejudice the payment obligation of the JVC in respect of payments due from August 30, 2005 under contracts for capital works-in-progress as contained in Article 5.2 (b) (ii) hereof.
(ii) Work in Progress: Parties expressly agree that from the Effective Date, JVC shall be liable to perform all obligations of AAI (including payment obligations) under all contracts and agreements between AAI and any third party as existing on Effective Date. Without prejudice to the generality of the foregoing, from the Effective Date, the JVC shall be liable for performance of all works-in-progress at the Airport; provided however that notwithstanding the foregoing and Article 3 hereof, JVC shall be liable for making all payment in respect of all capital works-in- progress at the Airport from August 30, 2005, which payment shall be made by JVC to AAI within 15 (fifteen) days of Effective Date on the basis of detailed separate accounts maintained by AAI in this regard and furnished to JVC on Effective Date. It is clarified that these capital works-in-progress are part of the Mandatory Capital Projects to be undertaken by the JVC. Furthermore, AAI hereby undertakes to provide to JVC, from time to time until Effective Date, provisional accounts in respect of the abovementioned capital works-in-progress. In relation to the accounting treatment of capital works-m-progress, the expenditure incurred by the JVC from Effective Date will continue to be shown by the JVC in its books as capital work-in- progress till such time the JVC completes the relevant capital work-in-progress. The amount shown in the books of account of the JVC will be restricted to the expenditure incurred by the JVC on such works till the time of its completion. On the completion of the capital works-in-progress, the JVC should transfer the same to the concerned completed works assets. Further the JVC should also provide depreciation on those portions of the completed assets.
(ii) It is expressly agreed that notwithstanding anything contained in this Article 5, nothing contained in this article 5 shall apply or relate to any contract entered into by AAI with any third Entity in respect of or relating to the provision of CNS-ATM Services to be provided by the AAI under the provisions of the CNS-ATM Agreement.
(iii) Joint Committee: Immediately after the date hereof, the Parties will constitute a joint committee for the duration of the Transition Phase consisting of 3 representatives each of AAI and the JVC, which joint committee shall be responsible for the overall supervision of the Airport operations. Provided however, the JVC shall have the responsibility of putting into place the Transition Plan and operating, maintaining, developing,designing, constructing, upgrading, modernising, financing and managing the Airport
(iv) List of Existing Assets: The JVC shall prepare a list of all Existing Assets at the Airport and AAI and JVC shall mutually agree on the same.
(c) It is clarified that any actions of AAI during the Transition Phase pursuant to this Article 5.2 shall be undertaken by AAI not in its personal capacity. All benefits and burdens associated with the actions of the AAI pursuant to this Article 5.2 shall be to the account of the JVC and not the AAI. To this end, JVC shall indemnify and keep indemnified AAI, against any liability or cost, arising on account of any reason whatsoever (except any liability or cost arising due to gross negligence or wilful default of the AAI), as relatable to the Airport, during the Transition Phase. It is further clarified that any portion of the charges (Aeronautical Charges and charges for Non-Aeronautical Services) as may be collected by the AAI during the Transition Phase shall be collected by AAI for and on behalf of the JVC and shall be deposited by AAI into the Escrow Account.”

20. The perusal of Clause-2.1 of OMDA also provides that only some of the functions of the AAI were assigned to the lessee.
21. Learned senior counsel for the petitioner has also submitted that Clause-20.3.2 of the OMDA also provides that in case of any conflict between the terms of this agreement and the terms of the project agreement, the terms of this agreement shall prevail. However, I consider that there is no space for any conflict between the same. I have gone through the arbitral award very carefully; learned Arbitral Tribunal has considered all the arguments very carefully. It is advantageous to reproduce the relevant part of the award which is as under:
“24. The case of the claimant is that under the OMDA especially Article 5.2.b, the respondent was required to render all reasonable assistance to transfer/novate all existing contracts and agreements between AAI and any third party relatable to the Mumbai Airport to the claimant. It was urged by Mr. P. Chidambaram, ld. senior counsel appearing on behalf of the claimant, that under Chapter V of the OMDA, all rights and liabilities associated with the Operation, Management & Development of the Mumbai Airport would stand automatically transferred to the claimant which would be solely responsible for aeronautical services, essential services, and all other services other than reserved services. His submission is that “Existing lease(s)”is also a contract or an agreement and therefore, it is also liable to be transferred/assigned/novated in favour of the claimant. He submits that what was leased out by the respondent to the claimant is the entire land and construction forming part of the Mumbai Airport except Carved-out Assets. He contends that in terms of Section 109 of the Transfer of Property Act, 1882 (hereinafter referred as TPA). The claimant automatically stepped into the feet of the respondent and donned the role of lessor in place of the respondent. According to Mr. Chidambaram, the claimant becomes the lessor and is entitled to all rights of the lessor.
26. On the other hand, Mr. Balbir Singh, ASG appearing on behalf of the respondent submitted that “Existing Lease(s)”did not fall within the ambit of “Demised Premises” as defined under the Lease Deed or understood in OMDA. He submitted an Existing Lease(s)” does not constitute part of “Grant” in chapter II of OMDA and therefore, the claimant can claim no right, title or interest in respect of an “Existing Lease”. He further submitted that an “Existing Lease(s)” is a Capitalised Item dealt with specifically and therefore, it cannot form part of “existing contracts and agreements” as mentioned in article 5.2.b.1 of OMDA. He also submitted that under the Lease Deed entered into between the parties, the area forming part of Sahara Lease Agreement was never part of the “Demised Premises” and therefore, the question of transfer/novation of the Sahara Lease Agreement in favour of the claimant does not arise.
32.A reading of Article 2.6 of the OMDA (quoted above)
shows that lease interest which was agreed to be granted by the respondent in favour of the claimant is in respect of all lands along with building, constructions and immovable assets as described and delineated and shown in schedule 25 which is the map of Mumbai Airport, other than lands along with buildings, construction and immovable assets forming part of “Existing Lease(s)” and “Carved Out Assets”. What has been transferred is only the “Demised Premises” and the “Existing Lease(s)” and “Carved Out Assets” are not part of the property leased out to the claimant. In respect of “Carved Out Assets”, it has been clearly laid down that at any time during the term of OMDA, if the JVC (claimant) requires the land for providing aeronautical services and developing aeronautical services, the parties shall negotiate the conditions on which the respondent can lease the same to the claimant. Therefore, as far as, “Carved Out Assets” are concerned which form part of the schedule 27, these have been expressly kept out of the purview of the OMDA.
39. We are of the view, that clause 5.2.b cannot be read in isolation. Clause 2.6 of OMDA as pointed out above, provides that AAI will execute a Lease Deed in favour of the claimant from the effective date. This clause makes it clear that “all the land (along with any buildings, constructions or immovable assets, if ?any, thereon) which is described, delineated and shown in the Schedule 25 hereto, other than
(i) any lands (along with any buildings, constructions or immovable assets, if any, thereon) granted to any third party under any Existing Lease(s) constituting the Airport on the date hereof; and (ii) any and all of the Carved Out Assets and the underlying land together with any buildings, constructions or immovable assets thereon, and if any thereon granted to any third party under any “Existing Lease(s) shall not form part of the “Demised Premises”. The Lease Deed defines “Demised Premises in similar terms and clause 2.1.2 of the Lease Deed in no uncertain terms makes it clear that the “any land (along with any buildings, constructions or movable assets, if any, thereon under such Existing Leases together with all and singular rights, liberties, privileges, easements, rights of access, benefits and appurtenances whatsoever to the said Existing Leases”, which is the subject matter of “Existing Leases” shall from the date of expiry or early termination of the “Existing Leases” from an integral part of the “Demised Premises and from that day the claimant shall enjoy the leasehold rights over the said lands. At the cost of repetition, we may state that clause Article 2.6 of OMDA and Article II of the Lease Deed especially article 2.1.1 and 2.1.2 of the Lease Deed in no uncertain terms indicate that “Existing Lease(s)” do not form part of the “Demised Premises unless such Existing Lease(s) expires or is terminated during the period OMDA is in force. On the other hand, clause 5.2.b.1 provides that all existing contracts have to be assigned/novated by the respondent in favour of the claimant. In our view Article2.6 of the OMDA & Article 2.1.1 & 2.1.2 of the Lease Deed which are the more specific clauses dealing with specific terms i.e. “Demised Premises” and “Existing Lease” shall override the more general transfer “all existing contracts and agreements” contemplated in Article 5.2(b)(i). The specific must prevail over the general.
40. In our view, in OMDA, the intention of the parties clearly was that only the “Demised Premises as defined therein and in Article II of the Lease Deed were to be transferred to the claimant. An “Existing Lease(s)” was specifically excluded. The OMDA was to operate for 30 years. During this period many Existing Leases would expire. Some may have to be terminated for various reasons. If the “Existing Lease” expires or is terminated then clause
2.1 envisages that from the date of expiry/termination, the premises forming part of the “Existing Lease” would also form part of the “Demised Premises” under OMDA. This is something which is visualised to happen in the future. Therefore clause 5.2.b.1 can have no applicability to “Existing Leases”.”

22. A probe into the impugned arbitral award read with the relevant clauses of the OMDA and lease deed along with the submissions of the parties reveals that under the limited scope of Section 34, the present case do not warrant the interference of this Court as there is neither any violation of the fundamental policy of Indian law nor that of notions of justice or morality.
23. Perusal of the award indicates that learned Arbitrator has rightly construed Article 2.6 of the OMDA, that lease has been granted in respect of all lands along with building, constructions and immovable assets as described and delineated and shown in schedule 25 which is the map of Mumbai Airport, other than lands along with buildings, construction and immovable assets except “Existing leases” and “Carved out asset” learned Arbitral Tribunal has returned a correct finding that clause 5.2b cannot be read in isolation.
24. It is a settled proposition that an arbitral award cannot be set aside under Section 34 only because another interpretation is possible on the facts and circumstances and rather, the arbitrator is always to be considered as the final judge on the facts of the matter. In National Highway Authority of India v. Progressive-MVR (JV)23, Supreme Court held that “even when the view taken by the Arbitrator is a plausible view and/or when two views are possible, the particular view taken by the Tribunal which is also reasonable should not be interfered with…”
25. The view taken by the tribunal is well-reasoned and all issues have been meticulously considered without leaving out any vital evidence. Hence, none of the conditions for grounds of challenge under Section 34 have been fulfilled and I consider that there is no scope for interference by this court.
26. Hence, the petition stands disposed of.

DINESH KUMAR SHARMA, J
MAY 3, 2024/AR/AJ

1 (2020) 5 SCC 164
2 (1988) 3 SCC 63
3 2005 SCC OnLine AP 876
4 (2019) 15 SCC 131
5 2019 SCC Online Del 10516
6 Supra at note 4
7 2023 SCC OnLine SC 604
8 (2022) 4 SCC 116
9 (2022) 1 SCC 131
10 (2019) 4 SCC 163
11 (2020) 12 SCC 539
12 (2015) 3 SCC 49
13 Supra at note 4
14 (2019) 20 SCC 1
15 Supra at note 12
16 2021 SCC OnLine SC 508
17 Supra at note 10
18 Supra at note 11
19 2014 (9) SCC 263
20 (2006) 11 SCC 181
21 Supra at note 12
22 Supra at note 4
23 (2018) 14 SCC 688
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