MESCO AIRLINES LTD Vs. AVIAEXPORT

JUDGEMENT

(1.) THE challenge in this petition by Mesco Airlines Limited ('MAL') under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act') is to the impugned Award dated 22nd August 2005 being the majority award of two of the learned Arbitrators constituting the three-member Arbitral Tribunal ('Tribunal') adjudicating the disputes between the Petitioner and Respondent No. 1 M/s. AviaExport.

(2.) IT is stated that the Petitioner was to start a new venture of providing helicopter services to various organizations in India and in particular to the Oil and Natural Gas Commission ('ONGC'), a Government of India undertaking, which required helicopters to transport its oil exploration specialists and stores for off-shore operations in the Mumbai High Sea.

(3.) AS regards the main contract, the Petitioner herein (Respondent before the Arbitral Tribunal) was to deposit USD 70,000 with Respondent No. 1 (Claimant before the Arbitral Tribunal) one month prior to the delivery of the leased helicopter. The said amount was to be deducted from the first three monthly payment of USD 97500 and thereafter, till the end of the leased period USD 45,500 was to be charged per month regardless of the actual hours flown, however, an additional amount of USD 650 per hour had to be paid if the helicopter flew hours in excess of the period stated in paras 14.1.2 and 14.1.3 of the contract. All the spares and consumables were to be supplied by Respondent No. 1 at its own expense. The lease period was for two years. It was agreed that all fuel consumed during flight and during any ground running was to be paid by the Petitioner. The Petitioner was also required to provide a first class bank guarantee of 1 lakh USD in favour of Respondent No. 1 confirming the payments to Respondent No. 1 of flying charges as agreed between the parties.