Bombay HC Restores Interim Relief Pleas Against AAI, Says Interim Relief Court Must Examine Arbitrability Bar

The Bombay High Court has held that, in a case involving airport premises, the question of whether a dispute can be referred to arbitration requires examination by the court hearing interim relief petitions under the Arbitration Act, especially where a law may bar arbitration.

The court made this observation while restoring petitions filed by licensees against the Airports Authority of India (AAI) seeking interim protection against termination of their licence agreements and eviction from airport premises under the Arbitration and Conciliation Act

The court said that while arbitral tribunals usually decide their own jurisdiction, this case is different because the sole arbitrator appointed by consent later resigned, leaving no tribunal in place.

Justice Somasekhar Sundaresan observed that "Ordinarily, even if an arbitration agreement had exclusion or even in the absence of any arbitration agreement, parties to a dispute can always consent to proceed to arbitration, with such consent constituting the arbitration agreement. However, where there is a statutory bar, the question that would arise is whether the parties can at all agree to proceed to arbitration. This would be a neat question of jurisdiction. The question of jurisdiction would ordinarily lie before the Arbitral Tribunal but in Section 9 proceedings, the question of jurisdiction would be considered by the Section 9 Court."

"...since the Arbitral Tribunal came to be appointed by consent under Section 9 of the Act, with no occasion for this Court to consider the issues now raised in the Review Petition, in my opinion, the ends of justice warrant a reconsideration of the original Section 9 Petitions afresh on merits, and a case for review on merits has been made out.", it added.

The dispute arose from licence agreements between AAI and private parties, including Satyavan Vishnu Agate and others, for use of airport premises.

AAI issued a stop-work notice on December 31, 2024, and later terminated the agreements on March 22, 2025. The licensees then approached the High Court seeking interim relief under the Arbitration Act against termination and eviction.

During earlier hearings, AAI agreed to refer the disputes to arbitration and maintain the status quo. Based on this consent, the Court disposed of the interim relief petitions and appointed an arbitrator.

However, the sole arbitrator later resigned, leaving the tribunal non-functional.

AAI then filed review petitions, arguing that the disputes relate to eviction from airport premises and must be decided under the Airports Authority of India Act through designated Eviction Officers, not arbitration.

The licensees opposed this, saying the disputes are commercial and should be decided by an arbitral tribunal.

The court noted that the earlier orders were passed on consent without examining whether arbitration was legally allowed. It also found that there is a prima facie issue on whether the law bars arbitration in such cases.

It said this issue requires consideration in the restored interim relief petitions.

The court therefore allowed the review petitions and restored the petitions for fresh hearing. It allowed both sides to raise all arguments on jurisdiction and merits before the appropriate bench.

The court also directed that the current status quo will continue until the matter is heard again.

For Petitioner (Airports Authority of India): Advocates Pravin Samdani, Shilpa Kapil, Chidanand Kapil, Darshit Jain, Shruti Bhatt, Aishwarya Mall, Vishwabharati Devkhile.

For Respondent (Satyavan Vishnu Agate & Ors.): Advocates Samit Shukla, Vaibhavi Bhalerao, Karl Tamboly.