ChPT loses decade-old case to CCT

The fight was in connection with the ChPT imposing a fine of Rs 63.86 crore on Chennai Container Terminal (CCT) for alleged non-achievement of output targets.

The first bench comprising Chief Justice Indira Banerjee and Justice Abdul Quddhose while setting aside the judgement passed by a single judge on January 8, 2014, in favour of the ChPT, said, “In our view, the single judge has failed to appreciate the law relating to the setting aside of an arbitral award under the Arbitration Act, 1996.” 

Noting that in setting aside the award, the single bench, sat in an appeal over the award, re-analysed the evidence and adopted the minority interpretation out of two plausible interpretations of articles of the contract, which is not permissible under the Arbitration Act, the first bench said. 

The issue goes back to December 17, 2007, when ChPT informed CCT that it had failed to achieve the required percentage of non-transshipment traffic as per the license agreement and demanded Rs 63.86 crore as fine. It also encashed Rs 47.08 crore bank guarantee provided by the CCT. 

The dispute was referred to an arbitration tribunal presided by former CJI RC Lahoti. In 2013, the tribunal with two former judges of MHC Justice R Jayasimha Babu and Justice SA Kader as members decided in favour of the CCT and directed the ChPT to return the encashed amount to the CCT. Aggrieved by the award, ChPT moved the High Court. 

On January 8, 2014, a single judge allowed the plea and held that the ChPT is entitled to such demand for non-achievement of output targets. Assailing the order, the CCT moved the present appeal and has now obtained a favourable order.