Disputes Regarding Eviction & License Termination Of Airport Premises Not Arbitrable; Chapter-VA Of AAI Act Is A Complete Code: Bombay High Court

"Chapter-VA of the AAI Act is a complete code... resolution of disputes relating to eviction of the Petitioners cannot be resolved through arbitration, both on account of statutory bar under Section 28-M of AAI Act... as well as on account of specific covenants of the license agreement," Bombay High Court, in a significant ruling dated May 7, 2026, held that disputes concerning the termination of licenses and the subsequent eviction from airport premises are non-arbitrable.

A bench of Justice Sandeep V. Marne observed that Chapter-VA of the Airports Authority of India Act, 1994 (AAI Act) constitutes a "complete code" for dealing with unauthorised occupants, thereby ousting the jurisdiction of arbitral tribunals. The Court clarified that the validity of a termination notice serves as a defense to be raised before the statutory Eviction Officer rather than a subject for private arbitration.

The case arose from termination notices issued by the Airports Authority of India (AAI) on March 22, 2025, to Survee Shidal and Survee Foods Private Limited, who held licenses for "Restaurant-cum-Hangout" formats at Juhu Airport. The AAI terminated the agreements alleging unauthorised construction and that the allotting officer lacked the necessary power to grant the land. Aggrieved by the termination, the licensees approached the High Court seeking interim measures under Section 9 and the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

The primary question before the Court was whether disputes relating to the termination of licenses and the eviction of occupants from airport premises are arbitrable under the Arbitration Act. The Court was also called upon to determine if the statutory mechanism provided under Chapter-VA of the AAI Act acts as a bar to referring such disputes to an arbitral tribunal.

The Court began by scrutinizing the specific arbitration clause contained in the Concession Agreements executed between the parties. It noted that while Clause 25 provided for dispute resolution through mediation and arbitration, Clause 25.1 and Clause 25.10 explicitly created "excepted matters." These clauses stipulated that no dispute could be referred to arbitration if it fell under the eviction and recovery procedures provided in Chapter-VA of the AAI Act.

Contractual Clauses Explicitly Exclude Eviction From Arbitration

Justice Marne observed that the language of the agreement was unambiguous in its intent to keep eviction matters outside the purview of private adjudication. The Court held that on a strict interpretation of Clause 25.10, the parties had consensually agreed that matters governed by the special statutory procedure for recovery of possession would not be arbitrable. The bench emphasized that in respect of such "excepted matters," an arbitrator lacks jurisdiction, and any reference would be invalid.

Chapter-VA Of AAI Act Constitutes A Complete Code For Eviction

The Court analyzed the statutory framework of Chapter-VA, which was inserted into the AAI Act by a 2003 amendment to facilitate the smooth eviction of unauthorised occupants from airport premises. It noted that the definition of "unauthorised occupation" under Section 28-A(f) specifically includes the continued occupation of premises after the authority to occupy has been determined or terminated for any reason. Consequently, upon the issuance of termination notices, the petitioners automatically fell within this statutory definition.

Statutory Bar Under Section 28-M Overrides Private Arbitration Agreements

Highlighting the public policy aspect, the Court referred to Section 28-M of the AAI Act, which provides finality to orders made by the Eviction Officer and expressly debars civil courts from granting injunctions against actions taken under that Chapter. The bench noted that this statutory bar, read in conjunction with Section 2(3) of the Arbitration Act, renders the dispute non-arbitrable as a matter of public policy. The Court cited the Supreme Court decisions in Vidya Drolia v. Durga Trading Corporation and Booz Allen and Hamilton INC v. SBI Home Finance Limited to support this finding.

“The legislature is entitled to exclusively reserve certain category of proceedings for public forums... Exclusion of the jurisdiction of the Arbitral Tribunal are matters of public policy.”

Validity Of Termination Can Be Raised As Defence Before Eviction Officer

The petitioners argued that the legality of the contract termination itself should be decided by an arbitrator even if the eviction is handled by the statute. Rejecting this, the Court held that the validity of the termination is inextricably linked to the status of "unauthorised occupation." It observed that if the petitioners believe the termination is illegal, they must set this up as a defense before the Eviction Officer. The Court relied on the Delhi High Court's view in AAI v. M/s. Grover International Ltd., which held that a lessee cannot rush to arbitration to pre-empt statutory eviction proceedings.

High Court Follows Precedent Set In HLV Limited Case

The Court placed heavy reliance on the prior ruling in HLV Limited v. Airports Authority of India, where it was held that eviction from airport premises is not amenable to arbitration. The bench noted that the HLV Limited judgment had been affirmed by the Supreme Court, which rejected the contention that an arbitrator could look into possession issues simply because other commercial disputes were being referred to arbitration. Justice Marne remarked that the objective of Chapter-VA would be undermined if private parties could prolong their stay on public land through arbitration.

“To now inflict violence to the beneficial provisions of Chapter VA of the AAI Act, aimed at achieving a wider public purpose... is unacceptable.”

The High Court concluded that since the core dispute involved the termination of licenses and the recovery of airport premises, the matter fell squarely within the exclusive jurisdiction of the Eviction Officer under the AAI Act. The Court dismissed the Section 9 petitions and vacated the earlier status-quo orders. It disposed of the Section 11 application but granted the petitioners liberty to file a fresh application only for those specific disputes, if any, that are not covered by the eviction and recovery procedures of Chapter-VA.

Date of Decision: 07 May 2026