Mumbai: Admitting an appeal for a hearing filed by the Brihanmumbai Municipal Corporation (BMC), the Bombay high court has granted an interim stay on an arbitral award that ordered the civic body to pay a company Rs 125 crores in damages in a dispute over an agreement to put up street furniture and signages as a pilot project in the city’s southern part.

Justice S.C. Gupte, in his order passed on October 29, granted stay on the implementation of the order passed by an arbitrator directing the BMC to pay Rs 125 crore to the company, Clear Channel Mumbai Private Ltd. The arbitrator had passed the order in July 2017. The dispute between the civic body and the company is over a contract that was awarded to the company for BMC’s decade-old initiative to provide world-class facilities to Mumbai citizens by way of street furniture and signages including billboards, benches, litterbins, drinking fountains, and beautification of traffic islands.

As a pilot project to provide such facilities, the BMC issued a public notice in 2008, inviting tenders for the initiative in seven city zones.

For its prime “zone one” area i.e. Marine Drive to Cuffe Parade in south Mumbai, the civic body selected Clear Channel and entered into a 20-year contract with the
company in 2010.

According to the company, the dispute arose when the BMC insisted on certain “unauthorised conditions” after signing the contract. The civic body issued a show cause notice to the firm and terminated its agreement in January 2012. Following this, the company approached the Bombay high court challenging the validity of the cancellation and the HC sent the dispute for arbitration.

The arbitrator in July 2017 declared that the contract was liable to be implemented and had not been terminated at all.