INDIA. On Friday the Supreme Court issued a temporary stay of the recent Karnataka High Court judgement that had over-ruled Bangalore International Airport Ltd’s (BIAL) decision to award its duty free contract to The Nuance Group and Shoppers’ Stop.
The court ruled that the parties can maintain the ‘status quo’ at Bengaluru International Airport until 16 February, when the matter will be heard.
The fate of the controversial duty free contract is likely to take a decisive step at that point. Earlier the Karnataka High Court, mirroring a similar Bombay High Court ruling in Mumbai last year, had allowed a petition by Flemingo Duty Free Shops Pvt Ltd seeking for the award to be quashed. Flemingo had alleged that it was wrongly excluded from both tender shortlists.
Crucially, the respective High Courts ruled that both Mumbai International Airport Limited and BIAL were “˜state’ bodies (and therefore bound by certain obligations in the contractual process), despite their public-private-partnership ownership models. As reported, on 19 December 2008 the Karnataka High Court set aside the BIAL award and directed BIAL to issue a fresh tender within 45 days.
A new tender is now a strong possibility, according to well-placed sources. Such a prospect was only avoided in Mumbai by Flemingo entering into a joint venture with the incumbent retailer, DFS Group. The situation is more complex in Bangalore as the stores are run by two companies – Nuance and Shoppers’ Stop. It is certain, though, that intense discussions are taking place behind the scenes involving the various players. But the outcome remains murky, and the hiatus is unsatisfactory for India’s travel retail industry.
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