Shreya Gupta
The Judgment underscores issues like the proper allocation of liabilities, regulatory enforcement lapses, and the consequences of malicious litigation.
The Airport Authority of India filed a suit in 1997 against Aer Lingus and East-West Travel & Trade Links Ltd., along with related parties, seeking recovery of ₹2.71 crores plus interest for charges such as landing, parking, and navigation fees for aircraft VT-EWH and VT-EWI, which were leased by Aer Lingus to East-West Airlines. The aircrafts were grounded in Mumbai due to outstanding dues and litigation.
The plaintiff claimed that AAI sought the right to detain the aircraft until all the charges were paid, claimed a lien over the aircraft and demanded joint liability from all defendants for the unpaid dues. At the same time, the defendants argued that they were merely the lessor of the aircraft and had no liability for operational charges incurred by East-West Airlines. Aer Lingus also alleged collusion between AAI and East-west Airlines pointing to leniency in allowing operations despite unpaid dues.
The Court held that Aer Lingus was not liable for the charges, as the agreements and services were directly between AAI and East-West Airlines. Hence, the airline and its operator were found solely responsible for the dues.
Aer Lingus was awarded ₹96.25 lakhs as reimbursement for bank guarantee charges it incurred over 27 years of litigation and AAI was ordered to pay ₹1 crore as exemplary costs and ₹50 lakhs as litigation costs to Aer Lingus. The Judgment emphasized the need for AAI to bear costs for wrongful litigation and the undue financial burden placed on Aer Lingus.
Case Name: Airport Authority of India v. Aer Lingus & Ors.
Commercial Suit Number: 1143 of 2024
Bench: A.S. Kazi