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2017 Supreme(Bom) 745
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R. M. SAVANT, J.
Maharashtra Maritime Board - Petitioner
Versus
M/s. PNP Maritime Services Pvt. Ltd. - Respondent
ARBITRATION PETITION NO.522 OF 2011
Decided On : 22-06-2017
For the Petitioner:Mr. Mustafa Doctor, Senior Advocate a/w Mr. Narayan Sahu, Mr.Yogesh Chawak, Ms. Anuja Desai, Ms. Krishna Baruah i/by M/s. Legasis Partners
For the Respondent:Mr. Atul S. Rajadhyaksha, Senior Advocate a/w Mr. C. G. Gavnekar i/by Mr. G. S. Hiranandani
The interpretation of a contract is a matter within the jurisdiction of the Arbitrator, the Award passed by the arbitrator is ordinarily final, it cannot be interfered with unless the reasons/findings contained therein are totally perverse or Award is based on wrong proposition of law.
Headnote:
The Court held that the Arbitral Tribunal's finding that the Respondent had developed a Port and not a Jetty at Dharamtar was contrary to the terms of the Agreement between the parties and completely ignored the plain language of the Agreement. The Court also held that the Arbitral Tribunal erred in holding that the claim of the Petitioner with respect to all amounts due prior to 05.10.2002 are barred by the provisions of Section 45 of the M. B. Act and therefore cannot be recovered by the Petitioner. The Court further held that the Respondent was liable to pay to the Claimant at the rate of Rs.3/-per metric tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005.
Fact of the Case:
The Maharashtra Maritime Board (MMB) and PNP Marine Services Pvt. Ltd. (PNP) entered into an agreement in 2001, allowing PNP to use an existing jetty at Dharamtar for loading and unloading cargo for a period of 30 years. The agreement stipulated that PNP would pay MMB cargo-related charges as per the existing scale of rates fixed by MMB, as may be modified from time to time. A dispute arose between the parties regarding the rate at which PNP was liable to pay MMB for loading and unloading charges. PNP claimed that it was entitled to pay at the rate of Rs.3/- per tonne as per the 1996 Maharashtra government policy for the development of Ports, while MMB claimed that PNP was liable to pay as per the existing scale of rates fixed by MMB. The dispute was referred to arbitration, and the Arbitral Tribunal held that PNP was liable to pay MMB at the rate of Rs.3/- per tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005. MMB challenged the Arbitral Tribunal's award under Section 34 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The Court held that the Arbitral Tribunal's finding that PNP had developed a Port and not a Jetty at Dharamtar was contrary to the terms of the Agreement between the parties and completely ignored the plain language of the Agreement. The Court also held that the Arbitral Tribunal erred in holding that the claim of MMB with respect to all amounts due prior to 05.10.2002 are barred by the provisions of Section 45 of the M. B. Act and therefore cannot be recovered by MMB. The Court further held that PNP was liable to pay to MMB at the rate of Rs.3/-per metric tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005.
Issues: 1. Whether the Arbitral Tribunal's finding that PNP had developed a Port and not a Jetty at Dharamtar was contrary to the terms of the Agreement between the parties and completely ignored the plain language of the Agreement? 2. Whether the Arbitral Tribunal erred in holding that the claim of MMB with respect to all amounts due prior to 05.10.2002 are barred by the provisions of Section 45 of the M. B. Act and therefore cannot be recovered by MMB? 3. Whether PNP was liable to pay to MMB at the rate of Rs.3/-per metric tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005?
Ratio Decidendi: 1. The Court held that the Arbitral Tribunal's finding that PNP had developed a Port and not a Jetty at Dharamtar was contrary to the terms of the Agreement between the parties and completely ignored the plain language of the Agreement. The Court relied on the following factors: * The Agreement specifically referred to the existing jetty at Dharamtar and did not authorize PNP to construct a new jetty. * PNP had obtained permission from the government to construct a 100-meter jetty, not a Port. * The correspondence between the parties referred to the landing point or jetty, not a Port. * The Arbitral Tribunal's finding was contrary to its own site inspection report, which stated that three jetties were seen at Dharamtar. 2. The Court held that the Arbitral Tribunal erred in holding that the claim of MMB with respect to all amounts due prior to 05.10.2002 are barred by the provisions of Section 45 of the M. B. Act and therefore cannot be recovered by MMB. The Court held that Section 45 of the M. B. Act applies only to short-levied or erroneously refunded charges, and that in the present case, PNP had refused to pay the charges as per the Agreement, so there was no short levy or erroneous refund. 3. The Court held that PNP was liable to pay to MMB at the rate of Rs.3/-per metric tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005. The Court held that the 1996 Maharashtra government policy for the development of Ports was not applicable to PNP because it had not developed a Port, but only a jetty.
Final Decision: The Court allowed the Petition filed by MMB and set aside the Arbitral Tribunal's award to the extent that it held that PNP was entitled to pay MMB at the rate of Rs.3/- per tonne for the cargo handled by it at Dharamtar Port between the period 21.10.1999 and 18.08.2005. The Court affirmed the part of the Award which held that PNP was liable to pay MMB as per the scale of rates fixed by the Government from time to time. The Court also held that PNP was liable to pay interest @ 6% per annum on the amount now payable in terms of this judgment.
1. By the above Arbitration Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (For short “the Arbitration Act, 1996”), the Petitioner takes exception to the Award dated 04.02.2011 passed by a majority of two Arbitrators out of a Tribunal consisting of three Arbitrators. By the said Award, the Arbitrators have directed that the Respondent herein pay the Petitioner at the rate of Rs.3/-per metric tonne for cargo handled by it at Dharamtar Creek between the period 21.10.1999 and 18.08.2005. The third Learned Arbitrator has given his own independent Award thereby dissenting from the majority view. The third Learned Arbitrator has held that the Respondent is not entitled to pay charges as per the 1996 policy but is covered by the 1995 policy and would therefore have to pay for the loading and unloading of cargo at the rates fixed by the Government from time to time.
The Petitioner herein which is the Maharashtra Maritime Board is the original Claimant whilst the Respondent herein is the original Respondent in the said Arbitral proceedings and would be referred to as per the said nomenclature hereinafter.
2. The facts giving rise to the challenge raised in the above Arbitration Petition can be stated thus:-
The Claimant is established under the provisions of the Maharashtra Maritime Board Act, 1997 (“M. B. Act”for short), the Minor Ports and Jettys in the State of Maharashtra vest in it and that it is entitled to deal with the same. The Government of Maharashtra on 26.06.1995 by passing a resolution framed a policy, under which, it was decided to give land under water to private industrialists for building Jettys. The Government of Maharashtra thereafter by another Government Resolution dated 15.03.1996 formulated a policy for the development of Ports. As per the policy contained in the said Government Resolution, the Ports under the said policy (which contemplated an elaborate bidding process) were entitled to pay fees/charges to the Claimant for the loading and unloading of goods at a special rate of Rs.3/-per metric tonne as opposed to the regular tariff which was applicable under the Government Resolution dated 26.06.1995. It seems that the Respondent herein made a representation to the State Government on 01.04.1998 stating that the Respondent was created to provide Port and Port based services and it intended to develop a Port to handle cargo which is imported or exported. The Respondent undertook to develop a small Port at Dharamtar and requested for allotment of 5 acres of foreshore land. It seems that pursuant to the said application the Claimant by its letter dated 06.04.1998 called upon the Respondent to submit the particulars about the project. An Agreement was thereafter entered into between the parties on 07.11.1998 for a period of 11 months and thereafter another Agreement was entered into on 07.02.2001, by which a licence was granted to the Respondent for a period of 30 years for loading and unloading of cargo meant for import and export and also postal cargo at the existing Dharamtar Creek Jetty to make upon the said Jetty and to operate and to maintain the same. In terms of clause 28 of the said Agreement dated 07.02.2001 the Respondent was required to pay charges in respect of loading and unloading as per the existing scale of rates fixed by the Government of Maharashtra and as may be modified from time to time by it. The said Agreement also provides for payment of interest for outstanding amount at the rate of 18% per annum. The dispute between the parties was triggered of on account of the fact that the Respondent claimed that it was liable to be charges at the rate of Rs.3/-per tonne for loading and unloading cargo as per the 1996 policy and was not liable to pay as per the existing scale of rates fixed by the Government of Maharashtra and as may be modified from time to time by it.
3. The Government of Maharashtra by notification dated 19.08.2005 fixed the charges for the loadin
