Canadian court quashes confiscation of AAI dues, limits action against Air India – World Affairs SRS

Canadian court quashes confiscation of AAI dues, limits action against Air India

– World Affairs SRS

In a partial relief to the Center in its legal battle against the shareholders of Dewas Multimedia, a Canadian court has quashed an order by the International Air Transport Association (IATA) to forfeit dues to the Airports Authority of India (AAI).
The court, however, dismissed Air India’s (AI) appeal against a similar confiscation order, but limited its scope to 50 per cent.

The decisions are part of a ruling delivered by Justice Michel Pinsnault of the Superior Court of Quebec. They are on a petition by India against separate garnishment orders that led to the seizure of more than $30 million. The verdict was pronounced on Saturday.
The amount forfeited includes AI’s collection of ticket sales and route navigation charges collected by AAI.
Three shareholders of Devas, who won a $111 million arbitration award against the government, had moved the Superior Court in Quebec for enforcement. On their applications, decoration orders were issued on November 24 and December 31.
In its appeal, AI argued that it is in no way indebted to Dewas Multimedia shareholders and yet has forfeited substantial assets of the airline through an ex-parte process.
“The confiscated funds with IATA represent about 65 per cent to 75 per cent of its revenue. This effectively requires Air India to operate flights around the world with barely 25 per cent to 35 per cent of its normal passenger sales revenue.
Hence the continued operation of the airline is put at risk on account of these unilateral proceedings against it,” argued the airline. The AAI sought quashing of the seizure order as it presupposes state immunity provided in the State Defense Act.

While the court rejected AI’s application to quash the confiscation order, it limited the scope of confiscation to 50 per cent of its dues with IATA. The amendment was made after considering the enormous impact of the seizure action on the operation of AI.
The court concurred with the AAI’s view that the immunity of the State enforced by it should be decided on merits before authorizing any order of confiscation.
Justice Pinsault said, “The Court had no reason to proceed against AAI on an ex-parte basis, as it was admitted to rely exclusively on the allegations and representations of the plaintiffs (Devas shareholders) in the absence and without the knowledge of AAI.” Was.”
“We will study the verdict and decide on the next course of action,” a senior government official said on Sunday.
Shareholders of Dewas termed the decision as a big win as they can continue to forfeit Air India’s funds held in IATA. He said the court supported his claim of secure enforcement of arbitral awards in Canada.
He pointed out that the court observed that the actions of the Government of India leave little doubt that it would be impossible to execute treaty awards within India. This leaves the shareholders of Dewas with the only option to execute it on properties located outside that country, he said.

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