Interim Relief to Celebi Amid Dispute Over Termination of Ground Handling Concession

The Hon’ble Madras High Court, in the case of Celebi Ground Services Chennai Private Limited v. Airports Authority of India in O.A. Nos. 531 to 536 of 2025 and Arb. Appln. Nos. 734 to 737 of 2025, dated June 9, 2025, granted interim protection to Celebi Ground Services Chennai Pvt. Ltd. under Section 9 of the Arbitration and Conciliation Act, 1996, following the termination of a Concession Agreement dated April 3, 2023, by the Airports Authority of India (AAI).

These applications arose from a dispute between Celebi Ground Services Chennai Pvt. Ltd., a wholly owned subsidiary of the Turkish ground handling service provider Celebi Aviation, and AAI. Under the concession agreement, the applicant had been appointed as the ground handling contractor at Chennai Airport. However, following the cancellation of the applicant’s security clearance by the Bureau of Civil Aviation Security (BCAS), AAI issued a notice terminating the said concession agreement. Aggrieved by the termination, the applicant approached the Hon’ble Madras High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking urgent interim relief to restrain AAI from taking steps that could adversely affect its rights pending the resolution of the arbitral proceedings.

The applicant argued that the termination of the concession agreement was arbitrary, mala fide, and contrary to its terms, particularly as it followed the abrupt cancellation of security clearance without a fair hearing. Emphasising its significant investment in equipment and software, the applicant expressed concern over the potential unauthorised use of its assets by third parties.

After hearing both parties, the Court recorded the categorical undertakings made on behalf of the respondent: (i) that the applicant’s equipment and software would not be used by AAI or any third party pending the disposal of the present applications; and (ii) that the process of appointing a third-party ground handling contractor would be initiated through a public tender, the finalisation of which would remain subject to the outcome of the present applications and those pending before the High Courts of Madras and Delhi concerning the security clearance cancellation. The Court further directed that, in the event of any breach of the recorded undertakings, the applicant would be at liberty to approach the Court for appropriate relief. Additionally, the Court granted liberty to the applicant to take an inventory of its equipment stored at the Chennai Airport premises, upon prior notice to and approval from the respondent, and directed the respondent not to raise any objection to such inventory being conducted. The matter was adjourned for the respondent to file its counter.

This order underscores that contractual rights cannot be defeated by arbitrary administrative actions and highlights the judiciary’s role in safeguarding commercial investments. It reaffirms that interim relief plays a crucial role in preserving the sanctity of arbitration proceedings.