Case Note & Summary
The Bombay High Court dealt with three connected proceedings: two petitions under Section 9 of the Arbitration and Conciliation Act, 1996, and one application under Section 11 of the same Act. The petitioners, Survee Shidal and Survee Foods Private Limited, were granted licenses by the Airports Authority of India (AAI) to operate restaurant-cum-hangout formats at Juhu Airport. The licenses were for a period of 7 years, and the petitioners had taken possession and commenced construction. On 22 March 2025, AAI issued termination notices alleging non-compliance with license terms. The petitioners challenged these notices and sought interim relief to continue operations. AAI raised a preliminary objection that disputes relating to termination of license and eviction from airport premises were not arbitrable because the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP Act) provides an exclusive remedy for eviction. The court examined the license agreements, which contained an arbitration clause. The court held that the disputes were arbitrable because the termination was based on contractual terms and not on statutory grounds under the PP Act. The court distinguished between a contractual license and a statutory tenancy, noting that the PP Act applies to unauthorized occupants, but the petitioners were licensees with a contractual right to occupy. The court also noted that the arbitration clause covered disputes arising out of or relating to the agreement. On the merits of the interim relief, the court found that the petitioners had made out a prima facie case, balance of convenience was in their favor, and they would suffer irreparable harm if evicted. The court granted a stay on the termination notices and directed the petitioners to continue operations subject to compliance with license terms and payment of dues. The court also appointed an arbitrator under Section 11 to adjudicate the disputes.
Headnote
A) Arbitration Law - Arbitrability - Termination of License - Arbitration and Conciliation Act, 1996, Sections 9, 11 - Disputes arising from termination of license agreements for airport premises are arbitrable as the agreements contain an arbitration clause and the termination does not involve statutory eviction proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 - Held that the mere existence of the Public Premises Act does not bar arbitration of contractual disputes (Paras 1-40). B) Arbitration Law - Interim Measures - Section 9 - License Agreement - Court granted interim stay on termination notices and allowed petitioners to continue operations subject to compliance with terms - Held that balance of convenience favored petitioners as they had invested substantial amounts and termination was based on alleged non-compliance without proper opportunity (Paras 30-40).
Issue of Consideration
Whether disputes relating to termination of licenses to occupy airport premises by the Airports Authority of India are arbitrable under the Arbitration and Conciliation Act, 1996.
Final Decision
The court held that the disputes are arbitrable and allowed the petitions. The termination notices dated 22 March 2025 were stayed, and petitioners were allowed to continue operations subject to compliance with license terms and payment of dues. The court also appointed an arbitrator under Section 11 to adjudicate the disputes.
Law Points
- Arbitrability of disputes concerning termination of license to occupy airport premises
- Distinction between contractual license and statutory tenancy
- Applicability of Arbitration Act despite Public Premises Act
- Interim measures under Section 9 of Arbitration Act
- Appointment of arbitrator under Section 11 of Arbitration Act
