New Delhi, July 11: The Supreme Court has sought response from GVK Airports Holdings and others on a plea by Airport Company South Africa (ACSA), a minority partner in Mumbai International Airport (MIAL), seeking appointment of a fresh arbitral tribunal to decide the dispute over alleged breach of the shareholder’s agreement (SHA) of April 2006. 

It also wants the apex court to set aside the appointment of the arbitrator by MIAL, which is led by majority partner GVK, and also quash the setting up of an arbitral tribunal, The Financial Express reported.

ACSA, which has nominated Professor Lawrence Boo as its arbitrator, wants the apex court to appoint the MIAL’s arbitrator for setting up a three-member tribunal to resolve dispute over alleged breach of contract in relation to the RoFR (right of first refusal) contained in the SHA.

It further said that GVK and MIAL were subjecting ACSA to an arbitral panel which does not have any arbitrator of its choice. “ACSA’s right of party autonomy has been given a complete go-by by the acts of MIAL and is a clear act of collusion at the behest of GVK,” the ACSA alleged in its application.

A Bench led by Chief Justice SA Bobde sought response from GVK Airports Holdings, the main holding company for MIAL, the Airport Authority of India, Bidvest and others to the ACSA’s plea that MIAL had “unilaterally” and “without its consent” purportedly appointed the arbitral tribunal in contravention of the SHA and Section 11 (5) of the Arbitration Act. “…the constitution of the Arbitral Tribunal is invalid and improper,” it stated.

While GVK Airport Holdings holds 50.5% in MIAL, Bidvest and ACSA (both being parties to SHA) owns 13.5% and 10%, respectively, and the remaining 26.5% stake is with the Airport Authority of India. Two South African firms have been trying to exit the venture and GVK and the Adani Group have been trying to acquire their stakes.

The South African airport management company submitted that GVK had invoked arbitration against ACSA in January and had appointed former CJI Justice Dipak Misra as its nominee arbitrator. GVK-led MIAL had also given three options to ACSA to choose its arbitrator. While ACSA had rejected nomination of the three proposed arbitrators, the investor was surprised and in “utter shock” to find that the two purportedly nominated appointed arbitrators had appointed the presiding Arbitrator (former SC Justice Anil R. Dave) and have thus, purportedly constituted the arbitral tribunal, the petition stated.

Terming the GVK’s invoking of an arbitration “completely frivolous since there is evidently no breach or material breach of the SHA,” ACSA said that the Adani SPA was executed on March 26, 2019, whereas the GVK SPA was signed only on April 23, 2019, it said, adding that the Adani SPA contains a pre-closing action under Clause 3 (1) (f) which gives GVK a right to exercise its right of first refusal before the sale to Adani.

Stating that the SC has the exclusive jurisdiction to appoint the nominee arbitrator on behalf of GVK and MIAL, the South African investor submitted that the dispute being raised by GVK can only be adjudicated by an arbitral tribunal setup under SIAC rules seated in Singapore.

In January, another arbitration panel led by former SC judge Madan B Lokur had restrained Bidvest Group from transferring its stake in GVK Airport Holdings, thus dealing a major blow to the Adani Group’s bid.

https://www.financialexpress.com/industry/supreme-court-notice-to-gvk-mial-on-acsas-plea-for-appointment-of-arbitrator/2020143

0 CommentsClose Comments

Leave a comment