The Delhi High Court has granted interim relief to Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) by partially staying key findings of an arbitral award that had held its policy on reassessment of license fees, following revision of catering tariffs, to be legally unsustainable. The petition, filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenges an award dated 4 April 2025 passed by a sole arbitrator.
IRCTC argued that Clause 8.3 of the Master License Agreement expressly permits revision of license fees based on reassessment of sales upon tariff changes. It contended that after tariff revisions in 2019 and the disruption caused by COVID-19, services resumed in 2022 with higher tariffs, justifying a corresponding revision in license fees. The petitioner submitted that the arbitral tribunal erred in holding that such revisions could not be imposed retrospectively and failed to correctly interpret the contractual provisions.
The petitioner further highlighted inconsistencies in the award, noting that while the arbitrator acknowledged IRCTC’s authority to reassess sales, the reassessment was nevertheless invalidated on grounds of lack of transparency and absence of a defined methodology. It was also argued that the award effectively jeopardised IRCTC’s broader policy framework governing catering services.
Opposing the petition, the respondent defended the arbitral award, submitting that the reassessment process adopted by IRCTC was unilateral, lacked transparency, and violated principles of natural justice. The tribunal had found that the respondent was neither adequately consulted nor provided with a fair and participatory mechanism before the revised license fees were imposed.
Taking note of the submissions, the Court held that the matter requires consideration and that IRCTC had established a prima facie case. Observing that irreparable harm would be caused if interim relief was denied and that the balance of convenience lay in favour of the petitioner, the Court stayed the operation of the impugned findings relating to IRCTC’s policy on license fee revision. However, it declined to direct the respondent to deposit any amount at this stage.
The matter has been listed for further hearing on 18 September 2026.
Appearances:
For the Petitioner: Mr. Saurav Agarwal, Ms. Manisha Singh, Mr. Anshuman Choudary, Mr. Kanav Khatana and Ms. Jyoti Singh, Advs.
For the Respondent: Mr. Jitender Mehta and Mr. Lalit Kumar
