Turkish firm Çelebi gets temporary relief from Bombay High Court

The Bombay High Court on Monday restrained Mumbai International Airport Limited (MIAL) from finalising bids to replace Turkish aviation firm Çelebi Aviation Holding's subsidiary for ground and bridge handling services at Chhatrapati Shivaji Maharaj International Airport..The interim relief was granted by a vacation bench of Justice Somasekhar Sundaresan in response to applications filed under Section 9 of the Arbitration and Conciliation Act, 1996. The Court said that its order will operate until the matter is heard by a regular bench after court vacations.While it restrained MIAL from finalising bid, the Court permitted MIAL to process and evaluate the technical and financial bids received in response to its tender but made it clear that a final appointment—whether to replace the petitioner or Indo Thai (currently appointed as an interim arrangement)—cannot be effected without prior leave of the Court.“As regards the tender for a firm and conclusive appointment of a replacement operator, it would be appropriate to give the parties some time to await the outcome of the challenge to the fundamental cause of the disputes and differences between the parties. In these circumstances, the Respondent is directed that until the regular Bench is seized of this matter upon reopening after vacation on the next date, a final appointment of a replacement operator must not be effected. It is made clear that any assessment of technical expertise, competence and review of financial bids that may be received pursuant to the tender may indeed be processed by the Respondent, but no final decision on appointment of an operator to replace the Petitioner or to replace Indo Thai (which is a pro tem arrangement) on a permanent basis shall be taken without the leave of this Court,” the order said..The dispute arose from the Indian government’s recent decision to revoke Çelebi’s security clearance, citing national security concerns after Turkey publicly backed Pakistan during a recent four-day Indo-Pak military conflict. The revocation led to the termination of Çelebi’s operational agreements at Mumbai Airport, a move the company claims was abrupt and unlawful..Subsequently, MIAL directed Celebi to hand over all equipment, property, personnel and staff to Indo Thai Airport Management Services Pvt. Ltd., which was nominated as a pro tem replacement operator.On May 17, MIAL issued a tender for a new long-term concessionaire, which would effectively conclude Celebi’s role at the airport..Celebi then moved Court claiming that the termination was not in accordance with the agreements, which provided for a thirty-day cure period before any termination could take effect. MIAL submitted that Celebi had, on the same day as the revocation, issued a notice to all its business partners across India stating that it was ceasing its ground handling operations immediately in light of the loss of security clearance and disowning liability. The Court noted that a case challenging the Bureau of Civil Aviation Security (BCAS) order, revoking Celebi’s security clearance was being heard by the Delhi High Court in relation to Celebi’s operations at Delhi International Airport. That case has already been fully argued and reserved for orders, it was highlighted..A similar challenge regarding the Mumbai operations is also pending before a division bench of the Bombay High Court.In light of this, it said that it would be inappropriate to allow any permanent steps—like appointing a new operator—until the root issue is resolved.In the interim, the court also directed MIAL to provide Celebi with copies of all operational and financial reports that it would normally receive under the original agreements. Since Indo Thai has temporarily taken over operations, it must now submit these reports to MIAL, which in turn must share them with Celebi..The Court emphasized that any temporary arrangements between MIAL and Indo Thai—or any other replacement—must not alter the original terms and conditions agreed upon with Celebi. “There shall be no variation of the same between the Respondent and Indo Thai, or any other person who may replace Indo Thai on a pro tem basis,” the Court said.It also allowed the parties to continue an inventory exercise to assess the value of Celebi’s assets currently at the airport. The Court directed that a senior official from Celebi be allowed entry into airport premises to oversee this inventory process, provided proper security checks are followed.The matter will be heard next on June 12 by the regular bench after the Court vacation. .Senior Advocate Chetan Kapadia along with advocates Rohan Aggrawal, Mayank Samuel, Neelanshy Roy, Sohil Mukadam, instructed by Mayank Samuel (Sirius Legal) appeared for the Petitioner.Senior Advocate Vikram Nankani along with Shoma Maitra, Nipeksh Arvind Jain, instructed by Wadia Ghandy & Co appeared for MIAL.[Read Order]