Celebi Moves Gujarat High Court To Restrain Adani's Ahmedabad Airport From Taking Final Call On Replacing Its Services

The Gujarat High Court on Thursday (June 5) issued notice on an appeal preferred by Celebi Ground Handling India Private Ltd challenging a commercial court's order which rejected its interim plea over termination of agreement for ground handling services at Ahmedabad International Airport operated by Adani group.

A vacation bench of Justice Devan M Desai after hearing the matter for some time in its order dictated, "Let there be a notice issued to respondent returnable on June 10". 

For context, the Ministry of Civil Aviation through the Bureau of Civil Aviation Security revoked the security clearance granted to the Celebi with immediate effect “in the interest of national security”on May 15. As per the appellant, the respondent Adani Ahmedabad International Airport Ltd had terminated the services of the appellant on the same for ground handling services. 

The senior counsel for the appellant argued that the matter arises out of airport services agreement between respondent and the appellant. 

"This all stems back to the Operation Sindoor background that happened. Broadly in one sentence the perception was that the state of Turkey had sided with the enemy state and therefore the security clearance of appellant and its parent company came to be withdrawn," he said.

He said that the entity before the high court is held by two Indian entities Celebi Airport Services India Private Limited (appellant's holding company) and Avihost Pvt Ltd. He said that the parent company is registered in Turkey.

"Security clearance is not up for challenge in Section 9 (Arbitration and Conciliation Act), as such this is the only reason perceivably, of course the order does not state any reason," he said. 

He argued that appellant's parent company Celebi Airport Services India Private Limited had already challenged the revocation of security clearance before the Delhi High Court and the judgment is awaited, adding that the revocation was based on the May 15. He said that the Delhi High Court has heard the writ petition and it is reserved for orders. 

"During the pendency of Section 9 (before commercial court in Gujarat), the plea has been filed yesterday. One of the reasons taken by commercial court is that I have not taken any steps to challenge revocation of security clearance. Yesterday I have challenged. But I had said that I'm in the process, coupled with the fact that parent company has challenged before Delhi High Court," he said. 

Section 9 under the Arbitration and Conciliation Act pertains to Interim measures, etc. which can be granted by a court. He said that the major relief in Section 9 petition was not stay of termination, but it was to preserve the subject matter contract and not finalising the tender for appointing a new handler. 

It was further argued that a similar contract was entered into by the appellant's sister concern–Celebi Nas Airport Services Ltd., for Mumbai International Airport, where before Bombay high court a Section 9 petition was filed. 

He submitted, "In Ahmedabad three operators are handling these services. The third one, Indo Thai has been already given over the charge and is performing our job. They (respondent) have themselves chosen Indo Thai, which is also being used for Mumbai airport".  He further argued that for now he was praying that the respondent may not take a final decision. 

The senior counsel referred to Bombay High Court order which had last month restrained the Mumbai International Airport Limited (MIAL) from taking a final decision in the bids invited on May 17 to replace Turkey-based Celebi for ground and bridge handling services at city's International airport, till Celebi's challenge to cancellation of security clearance is heard by a regular bench after the summer vacations.

"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 (MIAL) 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 Bombay High Court had said. 

The appellant's counsel thus argued that, "As on today, atleast till matter is put up for regular bench whenever, they may not take a final decision on appointing the third operator". 

Meanwhile the counsel appearing for the respondent argued that Ahmedabad Airport is given to Adani to manage on a lease. It was argued that it is a matter of grave security issue and any person associated with management of airport has to have national security clearance.

He pointed to Rule 92 of Aircraft Rules which is on 'Ground handling services' and states:

"The licensee shall, while providing ground handling service by itself, shall ensure a competitive environment by allowing the airline operator at the airport to engage, without any restriction, any of the ground handling service provider, who are permitted by the Central Government to provide such services: Provided that such ground handling service provider shall be subject to the security clearance of the Central Government". 

He thereafter said,"They have no right to continue today, there is no question of stalling the process...Once security clearance goes their right to act under license goes, it is a direct consequence. Once there is revocation of their security clearance I have no option to terminate their license. That is something I did on May 15. They could have challenged it earlier". 

After hearing the parts the court orally remarked, "As on today considering the issue I'm not inclined to protect you (appellant), as on today. If you want a simple notice can be issued and this can be listed. It can be kept on reopening. Because all these issues are required to go into detail. As on today the only issue is whether they can be stopped from taking any final call. I have made my mind I'm not inclined...". 

The court thereafter issued notice on the appeal and listed the matter on June 10. 

Case title: CELEBI GROUND HANDLING INDIA PVT LTD V/S ADANI AHMEDABAD INTERNATIONAL AIRPORT LIMITED