Canadian Court Orders Seizure of Air India Assets from IATA
A Canadian court has ordered the seizure of funds, over $300 million, which was collected by the Montreal-based International Air Transport Association (IATA) on behalf of Air India and the Airports Authority of India (AAI).
According to details, the Canadian court’s decision was based on a plea made by Devas Multimedia Pvt Ltd. The company had filed several petitions to enforce arbitration awards against the Government of India. However, Air India, which had been now acquired by the Tata Group, is free of past legal claims.
In an official statement, Devas said the company’s shareholders have been granted the right to garnish property belonging to AAI held by IATA in Montreal. “Requires IATA to garnish, among other things, air navigation charges and aerodrome charges, held by IATA, either at its head office in Montreal, or at any of its branches world wide. These actions represent the first fruits of a globally focused effort to attach assets of the Indian Government to satisfy the Devas Multimedia’s awards.”
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“On the intervention of Air India’s counsel, the commercial division of the Quebec Superior Court accepted to designate a judge on an urgent basis to hear the applications of quashing and seizures brought by Air India, AAI and IATA. The hearing will take place on January 4, a day on which court would normally be closed due to the holidays,” a senior government official said.
According to Simple Flying, IATA acts as a middle man in many airline and airport transactions. Through its billing and settlement plan, the association collects funds from ticket sales and route navigation charges, making it easier for airlines, travel agents and other parties to do business on a global scale. IATA pays out the ticket sales to the airlines, and fees collected in relation to route navigation to the airports authority.
In the case of India, the charges collected by AAI for route navigation and terminal navigational and landing charges accounts for around a quarter of all AAI’s revenue per year. In 2019/20, AAI collected a total of Rs 3,592 crore ($483 million).
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“This is a nightmare during the festive season when most flights are full arriving into India and passengers need to connect to domestic destinations – often requiring rescheduling due to delays,” said Abbas Moiz, national general secretary of Travel Agents Federation of India (TAFI) in a press release on Monday.
It should be noted that on December 22, 2021, Air India had removed all its ticket inventory from the global distribution systems (GDS) as they are linked to IATA billing and settlement plan (BSP).
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