Delhi High Court Appoints Arbitrator in Flemingo-AAI Duty-Free Shop Dispute
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TL;DR
- Delhi High Court appointed an arbitrator in the Flemingo-AAI duty-free shop dispute.
- The period spent in bona fide mediation was excluded when calculating limitation.
- The arbitrability of certain claims was left for the arbitral tribunal to determine.
- The petition to appoint the arbitrator was found to be within the limitation period.
Overview
On 7 September 2026, the Delhi High Court appointed a sole arbitrator in an arbitration dispute between Flemingo (DFS) Private Limited and the Airports Authority of India (AAI) over duty-free shop licensing at Amritsar Airport. The Court determined the arbitration petition was not barred by limitation, excluded the bona fide mediation period from limitation calculation, and left questions of claim arbitrability to the tribunal.
What Happened
Flemingo (DFS) Private Limited operated duty-free shops at Amritsar Airport under a license agreement with Airports Authority of India (AAI). Disputes arose over excess licence fee, annual escalation, and Minimum Annual Guarantee (MAG)/concession fee.
Flemingo's prior correspondence from 2017-2018 was found not to constitute a formal arbitration invocation. AAI's formal rejection of Flemingo's claims occurred on 11 October 2021.
Flemingo invoked arbitration through a legal notice on 14 March 2022. At AAI's suggestion, the parties entered mediation under the AAI Mediation Policy, which failed after 147 days.
Flemingo then applied to the Delhi High Court under Section 11 of the Arbitration and Conciliation Act for appointment of an arbitrator. AAI argued the petition was time-barred and disputed arbitrability of certain claims.
The Court held the 2022 notice validly triggered arbitration, the mediation period should be excluded from the limitation calculation, and questions of claim arbitrability should be decided by the arbitrator.
Justice Shalinder Kaur (Retd.) was appointed as sole arbitrator under DIAC rules.
Context
Under Indian law, Section 11 of the Arbitration and Conciliation Act deals with appointment of arbitrators by courts where parties cannot agree.
AAI's Mediation Policy provided for mediation as a step in dispute resolution prior to or alongside arbitration proceedings.
Why It Matters
- Clarifies application of limitation periods in Section 11 arbitration petitions when mediation occurs after invocation.
- Confirms referral courts' limited scope at Section 11 stage, emphasizing questions of arbitrability and claim limitation are for the arbitral tribunal.
- Sets precedent for treating mediation periods as exclusionary when calculating limitation for arbitration applications.