The arbitration tribunal has restrained South African firm Bidvest Group or Bid Services from transferring its stake in GVK Airport Holdings, the main holding company for the Mumbai International Airport, dealing a major blow to the Adani Group's bid.
The arbitration tribunal hearing a dispute between the later and its joint venture partner GVK has restrained any transfer of stake till "final disposal" of the arbitration proceedings.
The arbitration tribunal was hearing the case after the Supreme Court in December had directed it to take a call on the sale of Bidvest’s 13.5% stake in Mumbai International Airport (MIAL).
“It is directed that pending the hearing and final disposal of the arbitration proceedings, Bid Services or anyone acting on behalf of or under Bid Services is restrained from alienating by way of transfer to anyone or in any manner encumbering its 1.62 crore equity shares in Mumbai International Airport…,” said a tribunal bench headed by retired justices, Madan B Lokur, KPS Radhakrishnan and AK Patnaik.
In March this year, Bidvest entered into an agreement with Adani Group to sell Bidvest's entire stake in the airport for Rs 1,248 crore or at Rs 77 a share. “If the injunctive relief sought by GVK is not granted, irreparable damage will be caused to it in the sense that PP Purchase shares will be transferred to the third party and would no longer be available for purchase by GVK,” observed the tribunal in its order. “The induction of a third party in the affairs of MIAL would have its own consequences and it is difficult to foresee them,” it observed.
GVK has been able to satisfy all the parameters required for the grant of an interim direction in its favour.
The arbitration tribunal is hearing a dispute between the GVK and Bidvest where the Hyderabad-based infrastructure company, which owns the first right of refusal to buy out Bidvest’s stake, is also in the race to acquire the same stake.
Currently, GVK owns around 50.5% in Mumbai International Airport. While Bidvest and another South African investor ACSA collectively owns 23.5% and the remaining stake is with the Airport Authority of India (AAI).
Last year, in April, Bidvest had given a notice to GVK and ACSA Global, other shareholders in MIAL, which had the right of first refusal, intimating them about proposed sale to Adani. Later, GVK exercised its right of first refusal. However, it failed to purchase the stake within the prescribed time period.
Subsequently, the GVK had approached the Delhi High Court as well as the Supreme Court to seek relief. In December, the Supreme Court had directed the arbitration panel to decide the case expeditiously.
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