Turkish Firm Celebi's Subsidiary Moves Madras High Court Against Termination Of Contract By Chennai Airport

Tukey-based Celebi's subsidiary has approached the Madras High Court challenging the cancellation of the concession agreement by the Airport Authority of India (AAI) following the cancellation of its security clearance by the Bureau of Civil Aviation Security (BCAS) under the Ministry of Civil Aviation of India. On May 26th, Chennai Airport had cancelled its contract with Celebi Ground Services Chennai Private Limited.

While seeking an interim injunction before Justice Abdul Quddhose, Senior Advocate PS Raman submitted that the company had invested huge amounts of money for its equipments and software and that the AAI was attempting to appoint third parties who would exploit these instruments. Raman also argued that the sudden cancellation has caused huge financial loss to the company and that it was done due to complete vendetta. He thus sought for an interim injunction restraining the Respondent from creating any third-party rights that would adversely and irretrievably impact the rights of the Applicant, pending disposal of the arbitral proceedings.

Appearing for the AAI, Solicitor General Tushar Mehta submitted that it was necessary to appoint a third party for the smooth functioning of the airport and for the convenience of the people using the Chennai airport. 

When Raman informed the court about the interim order granted by the Bombay High Court and urged the court to pass similar relief, Mehta objected and informed that the facts of the present case were different from that of the one pending before the Bombay High Court. He informed the court that unlike the Bombay High Court, which was being operated by a private entity (Adani Enterprises), the Chennai Airport could not go by a private arrangement as it was a government entity. He further assured that a tender would be floated for appointing a third party and the tender would clearly mention that the finalization of the tender will be subject to the result of the present suit as well as the proceedings pending before Delhi HC challenging the denial of security license.

The court took note of the undertaking given by the AAI. The court also gave liberty to Celebi to approach the court if there is any violation of the undertaking by the authorities.

"On instructions, the Solicitor General and the Additional Solicitor General would submit that the respondents will have to necessarily appoint a third ground handling contractor on account of necessity. If same is not appointed, public interest would be defeated and the smooth operation of the Chennai airport will be greatly affected. They would also submit that the equipment owned by applicant that are lying in the Chennai airport will not be used by respondent or third party. Said undertaking given by SG and ASG on instructions is recorded. Both would also submit that since the resp is a Government of India undertaking, any government handling contractor can be appointed only through tender. They would also submit on introductions that it would be made clear in the tender that the finalization of the tender will be subject to the result of this suit as well as to the proceedings pending before Delhi HC regarding challenge against security license. Said undertaking is also recorded. In case of any violation by resp, the application is given liberty to approach the court," the court observed. 

The court added that in so far as the other petitions filed by Celebi, it could be adjudicated only after filing of the counters. The court thus directed the AAI to file their counters to the petitions and adjourned the hearing to 7th July 2025. 

Additionally, the court also allowed personnel from Celebi to enter the Airport premises for getting an inventory after getting prior approval from the authorities. The court also directed the respondent authorities to not make any objections in Celebi taking the inventory. 

Case Title: Celebi Ground Services Chennai Private Limited v. Airports Authority of India 

Case No: OA 531 of 2025