These applications are by the lessor of two Air-crafts, filed against the lessee, under Section 9 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Advocate Commissioner with full powers to seize both the air-crafts, equipments and documentation wherever found and to remove all obstructions to enable the applicant to repossess the air-crafts.
2. I have heard Mr.P.S.Raman, learned Senior Counsel appearing for the applicant in both the applications, Mr.R.Krishnamurthy, learned Senior Counsel appearing for the respondent in A.No.4806 of 2009 and Mr.R.Muthukumaraswamy, learned Senior Counsel appearing for the respondent in A.No.4807 of 2009.
3. Under two Air-craft Lease Agreements bearing Nos.131/2005 and 110/2005 both dated 5.5.2005, the applicant leased to the respondent, two Embraer 170 LR Air-crafts bearing Nos.ERJ170 MSN1700002 and ERJ170 MSN1700005 with Indian Registration Marks VT-PAB and VT-PAC respectively. These Lease Agreements filed as document No.1 in each of these applications, underwent three amendments. The amendments were made on 11.3.2006, 27.4.2006 and 13.2.2007 in respect of one Agreement and on 12.9.2005, 27.4.2006 and 13.2.2007 in respect of the other Agreement.
4. The term of the lease under
Article 3 of the Agreements, was fixed as 5 years from the "delivery date". In respect of one Air-craft, the date of delivery was 17.9.2005 and in respect of the other Air-craft, the date of delivery was 31.3.2006. Therefore, the respondent is entitled to make use of the leased Air-crafts for a period of 5 years from the respective dates of delivery, subject however to compliance with the terms and conditions of the Lease Agreements and the amendments effected thereto.
5. Complaining of the occurrence of "Events of Default", the applicant issued notices dated 17.6.2009 to the respondent. Subsequently, the applicant also served "Notices of Termination" dated 31.7.2009, terminating both the Lease Agreements and calling upon the respondent to return both the Air-crafts. Since the respondent did not comply with the demand for the return of the Air-crafts, the applicant has come up with the present applications, seeking repossession.
6. The "Notices of Default" dated 17.6.2009, issued by the applicant in respect of both the Lease Agreements, identified two items of default on the part of the respondent. In brief, they are as follows:-
(i) Under Article 4.1.3.1 of the Lease Agreements, the respondent was obliged to pay cash or furnish a Stand-by Letter of Credit, issued by a first line bank, payable in London at sight on first demand, for an amount equal to 3 monthly basic rent. Accordingly, the respondent did furnish Stand-by Letters of Credit, with expiry date on December 17, 2008. But the same were not replenished by the respondent, in accordance with
Article 4.1.3.1.2 of the Agreements.
(ii) Under the terms of the Lease Agreements, the respondent was obliged to pay Basic Rent and Maintenance Reserves every month. But the Basic Rent and Maintenance Reserves for the month of May 2009 were not paid in respect of the Air-craft VT-PAB and the Basic Rent for the month of May 2009 was not paid in respect of the Air-craft VT-PAC.
7. After the service of the Notices of Default, there was exchange of correspondence through e-mails between the parties for a period of about 35 days. In one of those mails dated 31.7.2009, the respondent informed the applicant of the transfer of a total amount of US$ 15,57,183.14 under Swift Nos.1090 TT 090227 to 090232. However, the applicant issued "Notices of Termination" dated 31.7.2009, claiming that the respondent failed to cure the failure mentioned in the Notices of Default. Thereafter, the applicant was also informed by the Axis Bank, through e-mail dated 5.8.2009 followed by a telephonic conversation, that the payments under the Swift Transfers mentioned by the respondent, in their mail dated 31.7.2009, were not intended for the applicant.
8. However, it appears that 4 payments were credited to the account of the applicant, on 5.8.2009. The details of these payments were as follows:-
Amount Reference No. USD 184,965.00 348/FTT/310 USD 184,965.00 348/FTT/314 USD 369,965.00 348/FTT/308 USD 369,965.00 348/FTT/309 That the above payments were received by the applicant from the respondent, is confirmed by a letter of the bank Banco Do Brasil dated 10.9.2009, filed as additional document No.8 by the applicant. Despite the receipt of the said payment, the applicant seeks repossession of the Air-crafts, on the ground that the trustworthiness is gone due to the false mail sent on 31.7.2009 and also on the ground that the maintenance reserves are not paid for more than 6 months..
9. The present applications were moved for the first time on 17.9.2009. Telegraphic as well as Fax Notices were ordered on 17.9.2009 by Mr.N.Paul Vasanthakumar, J., returnable by the very next day, namely, 18.9.2009. On 18.9.2009, the respondent entered appearance through counsel and sought time to file counter and also undertook to pay the arrears of two months rent in respect of both the Air-crafts, on or before 30.9.2009. Therefore, the applications were posted for hearing to 1.10.2009.
10. On 1.10.2009, it was reported that the payment of one month rental arrear was effected and that the payment of the rental arrears for the second month would be effected by 6.10.2009. Accordingly, the payment of the remaining rental arrear was also effected.
11. Thereafter, the applicant wanted to have an inspection of the Air-crafts on the ground that one of them had been grounded for technical reasons and that the applicant apprehended the possibility of removal of some of the parts. Therefore, inspection was directed to be carried out and both parties filed conflicting reports. Thereafter, the applications were taken up for hearing. In the meantime, the Basic Rent for October and November 2009, are also said to have been paid by the respondent.
12. Mr.P.S.Raman, learned Senior Counsel appearing for the applicant, drawing my attention to the various clauses in the Lease Agreements, submitted that as the owner of the Air-crafts, the applicant is entitled to repossess them, whenever a default was committed by the lessee and that the respondent has lost the trustworthiness, on account of their claim made on 31.7.2009 in respect of 5 payments through Swift Transfers, proving to be false. The removal of some of the parts from the grounded Air-craft, according to the learned Senior Counsel, proved the apprehensions of the applicant to be true. Therefore, the learned Senior Counsel submitted that both the applications deserve to be allowed.
13. Mr.R.Krishnamurthy and Mr.R.Muthukumaraswamy, learned Senior Counsel appearing for the respondent, submitted that in so far as the Basic Rent is concerned, there are no arrears as on date. In respect of Maintenance Reserves, there are certain arrears, but the respondent disputes the quantum, since the expenses incurred for maintenance and repairs, have not been reimbursed by the applicant. One Air-craft is admittedly grounded. Therefore, according to the learned Senior Counsel, the amount claimed by the applicant towards Maintenance Reserves, is not correct. The respondent has filed a statement as additional document No.15, claiming that an amount of US$ 757,200 alone is due towards Maintenance Reserves, upto 13.11.2009. In so far as the amount required to be kept in deposit (3 months rental), there is no dispute that the Stand-by Letter of Credit has to be replenished. Regarding the apprehension expressed by the applicant about the removal of some parts from the Air-craft which is grounded, it is the contention of the respondent that the same is misconceived.
14. I have carefully considered the rival submissions, as well as the pleadings and the documents. As stated earlier, the applicant issued Notices of Termination of the Lease Agreements, on 31.7.2009, on the premise that the defaults notified in their Notices of Default dated 17.6.2009, were not set right. The Events of Default, notified by the applicant comprised of 3 items (though indicated as 2 in the Notices of Default). They are (i) non payment of Basic Rent (ii) non payment of Maintenance Reserves and (iii) non renewal of the Stand-by Letter of Credit, in respect of the deposit of 3 months rentals.
15. Out of the above 3 items of default, the respondent has admittedly rectified the one relating to Basic Rent. With the payments made during the course of the present proceedings, the respondent has cleared all arrears of Basic Rent. Today, the Basic Rent is claimed to have been paid upto date and there is no dispute about the same.
16. In respect of the other two items viz., Maintenance Reserves and replenishment of deposit, there is a dispute only with regard to the Maintenance Reserves. The liability to keep alive the Stand-by Letter of Credit in respect of the deposit, during the currency of the Lease Agreements, is not and in fact, cannot be disputed. In such circumstances, the question to be considered in these applications is as to whether the applicant should be allowed to repossess the Air-crafts.
17. It appears that on 2.12.2009, the applicant has served through their counsel, a Statement of Claim and a Request for Arbitration, under the Rules of the London Court of International Arbitration. In Part IV of the said statement, the applicant has sought, among other things, the following reliefs:-
(i) US$ 1,110,000 representing the deposit equal to 3 months' Basic Rent under each of the Lease Agreements and
(ii) US$ 1,817,975.10 in respect of unpaid invoices towards Basic Rent and Maintenance Reserves under the Lease Agreements.
18. While the respondent does not dispute its liability relating to the relief claimed under item No.1 above, there is a dispute with regard to the second relief. The total amount of US$ 1,817,975.10 claimed under relief No.2, is made up of (i) the Maintenance Reserves due under 9 invoices, bearing Nos.ECC 199/09, 260/09, 261/09, 402/09, 403/09, 473/09, 474/09, 540/09 and 541/09, totalling to US$ 1,066,129.52 (ii) the default interest under invoice Nos.ECC 447/09, 448/09, 572/09 and 573/09 totalling to US$ 11845.58 and (iii) Basic Rent under invoice Nos.ECC 380/09, 379/09, 615/09 and 614/09 totalling to US$ 740,000.
19. Out of the above 3 parts of the monetary claim, the portion relating to Basic Rent appears to be doubtful, since it was claimed in the course of hearing of these applications that the Basic Rent due upto date has been paid. The same was not seriously disputed by the applicant. The portion relating to default interest is not very huge when compared to the total claim. But the portion relating to Maintenance Reserves, constitutes the major part of the claim, as it works out to US$ 1,066,129.52. But as pointed out earlier, the contention of the respondent is that since one Air-craft is grounded and also since the applicant did not reimburse the expenses incurred towards maintenance and repairs, they are liable to pay only an amount of US$ 757,200, under this head. This issue, therefore, is to be resolved only in the arbitration proceedings that the applicant appears to have already initiated.
20. In the backdrop of the above facts, let us now look into the scope of the relief sought under Section 9 of the Arbitration and Conciliation Act, 1996. Under
Section 9(ii) of the Act, a party is entitled to apply to the Court for an interim measure of protection, in respect of any of the following matters namely:-
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a Receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient;
21. Going by the language employed in Section 9(ii), it is clear that this Court has wide powers, ranging from a prohibitory order to an order for detention or preservation or interim custody or the appointment of a Receiver or even the sale of the goods which are the subject matter of the arbitration Agreement. While the power to grant a prohibitory order is analogous to the power under Order 39, Rules 1 and 2, CPC, the power to order sale should be construed as akin to the power conferred upon a Civil Court under Order 39, Rule 6, CPC. Similarly, the power to order the detention, preservation or inspection of any property under sub clause (c) of clause (ii) of
Section 9 is equivalent to the power conferred under Order 39, Rule 7, CPC and the power to appoint a Receiver should be construed as similar to the one under Order 40, Rule 1, CPC.
22. The power of a Civil Court to put a claimant or plaintiff or applicant, in immediate possession of a property, during the pendency of a suit or other proceedings, could be traced only to Order 39, Rule 9, CPC or to Section 151. At any time after the exercise of such a power, the Civil Court can always restore the parties to their original position. The power of restitution is conferred specifically by Section 144 CPC, even in cases where the status of the parties is altered in pursuance of a decree and such a decree gets modified or reversed on appeal. Despite conferring the power of restitution specifically under Section 144, the Civil Procedure Code provides for an interim order for immediate possession of a property or for the delivery of a property, only under very limited circumstances under Order 39, Rules 9 and 10, CPC, which read as follows:-
"9. When party may be put in immediate possession of land the subject-matter of sut. - Where land paying revenue to Government, or a tenure liable to sale, is the subject-matter of a suit, if the party in possession of such land or tenure neglects to pay the Government revenue, or the rent due to the proprietor of the tenure, as the case may be, and such land or tenure is consequently ordered to be sold, any other party to the suit claiming to have an interest in such land or tenure may, upon payment of the revenue or rent due previously to the sale (and with or without security at the discretion of the Court), be put in immediate possession of the land or tenure; and the Court in its decree may award against the defaulter the amount so paid, with interest thereon at such rate as the Court thinks fit, or may charge the amount so paid, with interest thereon at such rate as the Court orders, in any adjustment of accounts which may be directed in the decree passed in the suit."
"10. Deposit of money, etc., in Court. - Where the subject-matter of a suit is money or some other thing capable of delivery and any party thereto admits that he holds such money or other thing as a trustee for another party, or that if belongs or is due to another party, the Court may order the same to be deposited in Court or delivered to such last named party, with or without security subject to the further direction of the Court."
23. Interestingly, under the Arbitration Act, 1940, the power to pass interim orders, was conferred under
Section 41(b), in relation to matters set out in the Second Schedule to the old Act. A comparison of what was provided under the Second Schedule to the old Act, with what is provided by
Section 9 of the 1996 Act and what is allowed by the provisions of the CPC, would show the following:-
Nature of the power Provision under 1940 Act Provision under 1996 Act Provision under CPC Appointment of guardian for a minor or person of unsound mind Serial No.5 of the Second Schedule Section 9(i) Order 32, Rules 1,3 and 15 Preservation, interim custody or sale of the goods which are the subject matter of the proceedings Serial No.1 of the Second Schedule Section 9(ii)(a) Order 39, Rules 7 and 6 Securing the amount in dispute or in difference Serial No.2 of the Second Schedule Section 9(ii)(b) Order 38, Rules 5 and 6 Detention, preservation or inspection and authorising any person to obtain full information or evidence Serial No.3 of the Second Schedule Section 9(ii)(c) Order 39, Rule 7 and Order 26, Rules 9, 10A and 10C Interim injunction or appointment of Receiver Serial No.4 of the Second Schedule Section 9(ii)(d) Order 39, Rules 1 and 2 and Order 40, Rule 1
24. Apart from adopting what was contained in the Second Schedule to the 1940 Act, Section 9(ii) of the 1996 Act, also confers residuary powers under sub clause (e), enabling the Court to grant "such other interim measure of protection as may appear to the Court to be just and convenient". This power perhaps is similar to the inherent powers conferred by Section 151 CPC.
25. On a cumulative consideration of the above provisions, it is clear that a Court would order the custody of a property to be handed over permanently, only under extraordinary circumstances. This is for the reason that except in cases that would fall under Order 39, Rules 6, 9 or 10, CPC or under Order 26, Rule 10C, CPC, the grant of custody pending final adjudication, could only be by way of interim custody and not final custody. Though the provisions of the Code of Civil Procedure are not, per se, made applicable, in express terms, to the proceedings under the 1996 Act, the principles governing the grant of interim orders under the above provisions of the CPC, can certainly be kept in mind, while dealing with an interim prayer under Section 9. In ITI Ltd vs. Siemens Public Communications Network Ltd {2002 (5) SCC 510}, it was held in para-10 as follows:-
"We do not agree with this submission of the learned counsel. It is true in the present Act application of the Code is not specifically provided for but what is to be noted is: is there an express prohibition against the application of the Code to a proceeding arising out of the Act before a Civil Court? We find no such specific exclusion of the Code in the present Act. When there is no express exclusion, we cannot by inference hold that the Code is not applicable."
Therefore, it is certainly permissible to keep the provisions of the Code in mind, while deciding an application under Section 9.
26. When a Civil Court grants interim custody of a property to a Receiver, the property virtually comes under Court custody and the Court becomes custodia legis. The Court in such cases, holds de jure possession of the property through the Receiver. Therefore it can always put the person from whom the property was taken away, back into possession. Even in cases where the custody of a property is handed over to one of the parties, pending final adjudication of the dispute, the Court is vested with the power to order restitution at any point of time.
27. But unfortunately, in cases of this nature, where the property which is the subject matter of the applications under
Section 9 of the Arbitration and Conciliation Act, 1996, is sought to be taken out of the jurisdiction of this Court, by a person who may not be amenable to or available within the jurisdiction of this Court, it would not be proper for the Court to grant custody of the property to the applicant. The grant of custody in such cases, would actually become permanent custody, shutting the doors for the respondent to seek any relief other than monetary relief before the Arbitral Tribunal. What is actually contemplated by
Section 9 is an interim measure of protection and not a part or whole of the final remedy to a party. What is prayed for in these applications, is in the nature of a part of the final remedy and hence, in my considered view, the same cannot be granted.
28. Placing reliance upon the decision of the Apex Court in Firm Ashok Traders vs. Gurumukh Das Saluja {2004 (3) SCC 155}, a Division Bench of this Court held in M/s.Mil Merin Gas Agencies and another vs. TVS Finance and Services Ltd and another {2008 (3) LW 599}, as follows:-
"In the case of Firm Ashok Traders vs. Gurumukh Das Saluja reported in 2004 (3) SCC 155 = 2004 (3) LW 548, the Supreme Court, while noticed Section 9, held that the purpose of enacting Section 9 is to provide 'interim measures of protection' as distinguished from 'all-time or permanent protection'. It formulates interim measures so as to protect the right in adjudication before the Arbitral Tribunal from being frustrated."
Therefore the Court has to ensure, while deciding an application under Section 9 that it is only an interim measure of protection and not an all time or permanent protection.
29. Coming to the merits of the case, as stated earlier, the claim of the applicant in the arbitral proceedings, is three fold viz., (i) the replenishment of the deposit of 3 months rent (ii) the non payment of Maintenance Reserves from May 2009 and (iii) the non payment of Basic Rent. As I have observed earlier, the Basic Rent has been paid upto date. The deposit is admittedly not renewed. There is a dispute with regard to the quantum of Maintenance Reserves.
30. In the background of the above claim, two solutions are possible, to a dispute of this nature. They are (i) ordering the applications as prayed for, permitting the applicants to take away the Air-crafts and leaving the parties to convert all their claims into monetary claims and to allow them to work out those claims in the arbitration proceedings or (ii) permitting the respondents to retain the Air-crafts, after imposing such conditions upon them, as would safeguard both the monetary claims as well as the property rights of the applicants over the Air-crafts.
31. Now let me see the consequences that would befall upon both the parties, if the above solutions are adopted.
IF ALTERNATIVE-1 IS ADOPTED AND THE APPLICANT IS ALLOWED TO TAKE AWAY THE AIR-CRAFTS:
Consequences for the applicant:-
(i) The applicant will take away the Air-crafts.
(ii) Out of the two heads of claims made by the applicant before the Arbitral Tribunal, the claim for replenishment of the deposit of 3 months rent may not survive in view of the possession of the Air-crafts being handed over.
(iii) The respondent may contest the claim relating to Maintenance Reserves and the respondent may also make a counter claim for damages, on account of the termination of the contract and the repossession of the Air-crafts.
(iv) The applicant may also make an additional claim, if according to them, the condition of the Air-crafts was not what it ought to be, subject to normal wear and tear.
Consequences for the respondent:
(i) The respondent would lose possession of the two Air-crafts.
(ii) As a consequence, the respondent would also lose the status of an Airline Operator, since admittedly the respondent is in possession of only 5 Air-crafts (including the 2 which form the subject matter of these applications), which is the minimum required for a person to be recognised as such. This will lead to the remaining 3 Air-crafts also being grounded till such time, the respondent secures 2 more Air-crafts.
(iii) The liability of the respondent to keep the deposit of 3 months rent replenished, would be erased.
(iv) The respondent may contest the other claim of the applicant before the Arbitral Tribunal and may also lodge a counter claim for damages.
IF ALTERNATIVE-2 IS ADOPTED AND REPOSSESSION NOT PERMITTED:
Consequences upon the applicant:
(i) The applicant may not be able to get possession of one Air-craft till September 2010 and the other Air-craft till May 2011, when the respective periods of lease of the same would come to an end.
(ii) The applicant would consequently be entitled to sustain their claim for replenishment of the deposit of 3 months rent, before the Arbitral Tribunal.
(iii) The claim for Maintenance Reserves would continue to hang fire before the Arbitral Tribunal, since the liability regarding the same would continue till the possession of the Air-crafts are handed over.
(iv) The applicant is exposed to the risk of non payment of even the Basic Rent, for the rest of the term of the lease.
Consequences upon the respondent:
(i) The respondent may have to replenish the deposits.
(ii) The respondent may have to honour its commitments towards Basic Rent and Maintenance Reserves.
(iii) The respondent will have to allay the fears of the applicant with regard to the safety and security of the Air-crafts and its upkeep and maintenance, subject to normal wear and tear.
32. On a comparison of the consequences to which the parties would be exposed, under the alternative solutions available on hand (and referred to in paragraph-29 above), it is quite obvious that if the first solution is adopted, the respondent would suffer more damage than the applicant. If the second solution is adopted, the applicant will be exposed to a greater riskr than the respondent. There is a distinction between the two. In the first alternative, the respondent would suffer actual damage and certain unintended consequences, that would make the damage irreparable. On the contrary, in the second alternative, the applicant would only be exposed to a greater risk, without suffering actual damage. By imposing certain conditions upon the respondent, the risk to which the applicant may be exposed, can be reduced. But the damage that would be inflicted upon the respondent, by adopting the first alternative, cannot be mitigated.
33. It is a fundamental principle governing the grant of interim orders that the Court should weigh the balance of convenience in favour of both the parties and assess as to who would suffer irreparable loss and hardship, by the grant or refusal to grant, an interim order. If one party is sure to suffer loss and damage and another party would only be exposed to a risk (in contra distinction to actual damage), the Court should only prefer that alternative, by which the sufferance of the damage is prevented, even while the risk factors are reduced.
34. As I have pointed out earlier, the grant of the prayer of the applicant would admittedly result in the unintended consequence of making the respondent lose the status of an Airline Operator. It is admitted that as per the Civil Aviation Requirements issued under Rule 133A of the Air-craft Rules, 1937, a scheduled Airline would have to maintain a minimum fleet of 5 Air-crafts. The repossession of even one Air-craft by the applicant, would result in all the other Air-crafts being grounded and the respondent losing its status. This is not an injury that the applicant intends to inflict upon the respondent. It is an unintended, but not an unexpected consequence. Therefore, I am of the view that the prayer of the applicant cannot be granted.
35. At the same time, the applicant cannot be left in the lurch, when they are the owners of the Air-crafts and when the respondent has obviously committed default. Therefore, for allowing the respondent to enjoy the luxury of retaining the Air-crafts, the respondent may have to comply with certain conditions.
36. As already pointed out, the respondent has not replenished the deposit of 3 months rent. The respondent has an obligation to keep the deposit alive during the term of the lease. Similarly, the respondent also has a continuing obligation to pay the monthly basic rent and the maintenance reserves during the currency of the lease. In so far as the arrears of maintenance reserves are concerned, the respondent has filed a statement in their additional typed set of papers, admitting liability to the extent of US$ 757,200. But in the Statement of Claim filed by the applicant on 2.12.2009 before the London Court of International Arbitration, the applicant has made a claim for an amount of US$ 1,817,975.10, part of which represents arrears of basic rent. But during the pendency of these proceedings, the basic rent has been paid upto date. Therefore, if the component relating to basic rent is deleted, the amount due towards maintenance reserves alone would work out to US$ 1,066,129.52. If the respondent is directed to replenish the deposit and also secure the payment of the arrears of maintenance reserves, a major portion of the claim of the applicant before the Arbitral Tribunal itself would get satisfied, without inflicting irreparable damage and hardship upon the respondent.
37. Therefore, both the applications are disposed of on the following terms:-
(a) For the present, the prayer of the applicant for repossession of the 2 Air-crafts is rejected.
(b) The respondent is directed, within 15 days from the date of receipt of a copy of this order, either to replenish the Stand-by Letter of Credit, or to furnish a fresh Letter of Credit, in terms of Clause 4.1.3 of the Air-craft Lease Agreements dated 5.5.2005 for an amount equivalent to US$ 1,110,000, and ensure that the same is kept alive during the entire term of the lease as stipulated in the Agreements.
(c) The respondent is directed to pay to the applicant, within 30 days from the date of receipt of a copy of this order, an amount of US$ 757,200, representing the admitted arrears of maintenance reserves, without prejudice to their claim for any appropriation or adjustment.
(d) The respondent is directed to deposit into Court, within 30 days from the date of receipt of a copy of this order, to the credit of the above application, an amount equivalent to US$ 308,929.52 (US$ 1,066,129.52 minus US$ 757,200) to enable the applicant to withdraw the same, in the event of their success in the arbitral proceedings. The amount so deposited by the respondent, to the credit of the above application, can be kept in Fixed Deposit, till the conclusion of the arbitral proceedings before the London Court of International Arbitration.
(e) The respondent shall continue to pay the basic rent, supplemental rent and maintenance reserves, without fail, till the terms of both the leases expire and the possession of the Air-crafts is handed over back to the applicant.
(f) If the respondent fails to comply with any of the above conditions, the applicant will be entitled to seek an order for repossession of both the Air-crafts.
(g) In order to enable the applicant to ensure that the Air-crafts and its parts and accesseries are in tact and well maintained, it is open to the applicant, to make periodical inspections of the Air-crafts. As and when the applicant serves a letter on the respondent, seeking to carryout an inspection of the Air-crafts, the respondent shall arrange for such inspection, within a period of 24 hours from the time of service of such notice. The inspection shall be so arranged that it takes place at a time when a meaningful inspection could be carried out.
(h) There will be no order as to costs.
Svn