An arbitration proceeding in Delhi, India, has awarded Air India (AI, Delhi International) INR657.1 million (USD10.06 million) in its case against Dynamic International Airways (Greensboro Piedmont Triad International) concerning a failed Hajj pilgrimage contract.
Air India contracted Dynamic to provide it with India-Saudi Arabia charter capacity in 2013 and 2014. However, problems arose in 2014 when Dynamic allocated four instead of five aircraft to carry out the charter agreement, relying on a clause that Air India would make up the flights that Dynamic didn't undertake. As such, instead of ferrying nearly 72,000 pilgrims, it only transported roughly 47,000.
As a consequence of the inadequate capacity, numerous flights were either delayed or cancelled leading Air India to seek legal recourse.
Dynamic, in turn, filed a counter-suit for INR1.086 billion (USD16.6 million) citing a breach of contract. In the suit, Dynamic alleged Air India did not pay it for the roughly USD8.8 million it was due for the 2013/14 Hajj charter flights while also reneging on two future contracts covering the 2015 and 2016 seasons. Dynamic justified its claims on the grounds that it had already made "substantial" fleet investments by either acquiring or leasing additional aircraft in anticipation of demand.
However, Dynamic's petition to have the dispute heard in the United States and not India was also rejected by a US Federal Court.
Following a hearing in Delhi, the Business Standard newspaper reports the case's arbitrator, India's former Comptroller and Auditor General P Sesh Kumar, agreed with Air India's claims while dismissing those of Dynamic.
Air India now plans to secure payment via the US courts where the Indian ruling can be enforced via the United States Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T 2517.
In December last year, a North Carolina court also awarded the two Indian firms that acted as agents on Dynamic's behalf - BKP Enterprise and Expim International - a total of USD3.5 million in claims. They successfully argued breach-of-contract after Dynamic failed to pay them. They also claimed Dynamic had also intentionally interfered with their economic relationship with Air India, India's Central Haj Committee, and other government agencies.
