Delhi Airport wins arbitration against AAI, secures refund & payment waiver

In a recent arbitration ruling, Delhi Airport, under the ownership of GMR Group, has won a dispute with the state-owned Airport Authority of India (AAI) regarding revenue sharing during the Covid-19 period, according to a report by The Economic Times (ET). The tribunal’s decision favoured the airport, outlining specific directives that entail a refund of Rs 500 crore from AAI and a waiver of Rs 1,800 crore payment to the authority. AAI may contest the award.

Under the terms of the privatisation agreement established in 2006, Delhi Airport had committed to paying 45.99 per cent of its annual revenue as concession fees to AAI. Delhi International Airport Limited (DIAL), the entity operating the airport, invoked a force majeure clause to suspend the revenue-sharing agreement temporarily, citing the pandemic’s impact on traffic flows and revenue.

In January 2021, the Delhi High Court provided interim relief to the airport, allowing a deferment of revenue share payments to AAI until the completion of arbitration.

Now, the tribunal award has further extended this relief by excusing DIAL from making payments for the period between March 19, 2020, and February 28, 2022, attributing this to the force majeure clause. The airport has also secured a waiver on payments from January 2021 to February 2022.

Additionally, the tribunal has ruled for an extension of the concession agreement, granting the GMR Group the right to operate the airport until 2036, with an additional duration of one year and 11 months.

Following the arbitration outcome, shares of GMR Airports Infrastructure reached a multi-year high of Rs 87.55, marking a four per cent gain on the BSE during Monday’s intraday trade. This surge came after nearly three per cent of the total equity of the company changed hands on the NSE and BSE.

The stock had achieved a record high of Rs 132.35 on December 6, 2007.

 

First Published: Jan 08 2024 | 12:36 PM IST