Delhi HC restrains ACSA Global from transferring shares in MIAL to third party

The Delhi High court has restrained ACSA Global from taking any coercive or precipitative action with respect to the transfer of its shares in Mumbai International Airport Ltd (MIAL) to any third party till the next date of hearing.

The order was passed by a Single Judge Bench of Justice Jyoti Singh in a plea by MIAL's largest shareholder, GVK Airport Holdings. GVK has sought to restrain ACSA from selling, encumbering or creating any third party rights in its 12,00,00,000 equity shares in MIAL in favour of any person other than GVK.

GVK informed the Court that ACSA had written to it and the other shareholder in MIAL, Bidvest on February 14, 2019 communicating that it was desirous of transferring its shares.

It is GVK’s case that pursuant to its Right to First Refusal, on March 8, 2019, it exercised its option to purchase ACSA's shares at the price mentioned in the February letter, subject to the terms and communication being communicated. According to GVK, a contract was concluded between the parties on March 14.

It was GVK’s grievance that in spite of several communications, ACSA did not sign the Share Purchase Agreement on one pretext or another.

GVK then filed a petition under Section 9 of Arbitration Act which was disposed of after the parties settled their differences.

In the interim, GVK also invoked arbitration against other shareholders in MIAL i.e Bidvest, ACSA and others for a dispute in respect to the transfer of Bidvest’s shares as per the Share Holding Agreement for MIAL.

Subsequently, in June, the third respondent and MIAL shareholder, Airport Authority, refused to grant its approval to the transfer of ACSA shares to GVK on the ground that 30 days period for consummation of the transaction had expired and GVK had lost its Right to First Refusal. The third respondent also refused to refer the dispute to arbitration on the ground that identical dispute qua Bidvest was already pending before the Tribunal. In the meantime, ASAC sought to get itself deleted from the array of parties before the Tribunal.

GVK thus argued that since ACSA was not subjecting itself to the jurisdiction of the Tribunal, it had no remedy but to file the present petition.

GVK further informed the Court that ACSA had also entered into a Share Purchase Agreement with Adani Properties on March 22 despite the fact that the contract stood concluded on March 14.

This fact, GVK claimed, was neither disclosed to the Court nor to it.

GVK thus contended that ACSA could not be allowed to transfer its shares till a final decision in relation to the SHA is taken by the Tribunal and nor could ACSA transfer its shares to a third party till then.

ACSA also stated that it was awaiting the decision of the Tribunal on GVK’s plea under Section 17 Arbitration and Conciliation Act for certain reliefs against Bidvest and would not take any coercive action till then.

Based on the above, the Court ordered that in case the Arbitral Tribunal pronounces its order on GVK’s plea on transfer of Bidvest’s shares in MIAL before the next date of hearing, ACSA and other respondents would not take any coercive or precipitative action till the next date of hearing.

It said,

“It is however made clear that in case the order is pronounced by the learned Tribunal on the application under Section 17 of the Act before the next date fixed by this court, the respondents would not take any coercive or precipitative action till the next date of hearing fixed by the Court."

It added that the statements made by ASCA were without prejudice to the rights and contentions of ACSA to raise all objections available to them in law on the maintainability and if necessary, on merits.

The matter would be heard next on Jan 14.

GVK was represented by Senior Advocate Rajiv Nayar with Advocates Kartik Nayar, Ruby Singh Ahuja, Vishal Gehrana, Rishab Kumar, Sarthak Malhotra, Swikriti Singhania, Anmol Jassal and Saurabh Sethi.

ACSA Global was represented by Senior Advocate Gourab Banerji with Advocate NPS Chawla, Kaustubh Praksh, Mohit Pandey, Subhro P Mukarjee.

MIAL was represented by Senior Advocate Ravi Sikri with Advocate Akhil Sachar.

Airport Authority was represented by Advocates Digvijay Rai, Aman Yadav.

Read the Order: