Travel Food Services Limited has encountered a significant legal setback after the Delhi High Court set aside an arbitral award that was previously issued in the company's favor. The court order dated April 6, 2026, received by the company on April 12, 2026, has overturned the arbitral award dated September 26, 2022, in a dispute involving the Airport Authority of India.

Background of the Dispute

The legal proceedings stem from Travel Food Services' F&B concession operations at Dabolim Airport, Panaji, Goa. The company had initiated arbitration proceedings against Airport Authority of India, Goa Airport in 2018, seeking rebate in concession fees due to non-provision of electricity by AAI. Additionally, the company sought release of security deposits, bank guarantees, and other cash deposits held with AAI.

Court's Ruling and Rationale

The Delhi High Court allowed AAI's petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, which challenged the original arbitral award. In a significant development, the court ruled that the unilateral appointment of the arbitrator by AAI was 'void ab initio', thereby rendering the arbitral award a 'nullity' in the eyes of law.

The court's decision was based on a recent judgment of the Supreme Court, and notably, the High Court reached this conclusion without examining the merits of the original award. This procedural ruling has effectively invalidated the entire arbitration process that had previously favored Travel Food Services.

Impact on Pending Applications

As a consequence of the High Court's order, the execution application filed by Travel Food Services in April 2024 for implementing the arbitral award has also been disposed of as infructuous. This means the company cannot proceed with enforcing the favorable arbitral award that had rejected AAI's counterclaims pertaining to alleged non-payment of concession fees.

Company's Response and Next Steps

Travel Food Services has stated that it is currently assessing the implications of the court order in consultation with its legal advisors. The company is evaluating appropriate courses of action to safeguard its interests following this legal setback.

The development has been disclosed under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, as it represents a material change in the status of ongoing litigation involving the company. This disclosure follows the company's earlier mention of the case in its prospectus dated July 10, 2025.

Travel Food Services has received a Buy rating from HSBC with a target price of Rs 1520, as the brokerage firm highlights the company's strong market position and growth prospects in the airport food services sector.

Market Leadership and Growth Drivers

HSBC's recommendation is anchored on Travel Food Services' established position as a market leader in high-margin airport quick service restaurants and lounges. The brokerage firm points to the strong air travel outlook as a significant growth catalyst for the company's operations.

Investment Rationale

The Buy rating is supported by several key financial metrics and operational strengths:

Financial Strengths

HSBC emphasizes Travel Food Services' robust financial performance indicators that justify the positive outlook:

• Best-in-class ROCE: The company demonstrates superior return on capital employed compared to industry peers
• Strong Free Cash Flow: Consistent cash generation capabilities supporting business sustainability
• Healthy Dividend Yield: Attractive returns for income-focused investors

Market Concerns and Opportunity

The brokerage notes that the stock appears oversold due to concerns related to Middle East operations. HSBC views this market sentiment as creating an attractive entry opportunity for investors, given the company's strong fundamentals and growth prospects in the recovering aviation sector.

The recommendation reflects confidence in Travel Food Services' ability to capitalize on the anticipated recovery and growth in air travel, supported by its strategic positioning in high-traffic airport locations and operational efficiency.