The court emphasized the importance of correctly interpreting contract clauses and modifying the rate of interest based on negotiation meeting minutes.

1. This Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity, “the Act”) to set aside the award dated 11.3.2009 passed by respondents 2 to 4 (Arbitrators).

2. 1. The brief facts of the case are as under: The Government of India proposed to establish a Port for transportation of coal to the North Chennai Thermal Power Plant. The fifth respondent herein, namely, Chennai Port Trust, which was appointed by the Government of India as the Executing Agency for construction of Ennore Port, entered into Consultancy Agreement with the first respondent on 17.8.1994 and the agreement period is 54 months, namely, up to May, 1999.

2.2. The first respondent did not complete the project within the agreed time. Even prior to the expiry of the agreement period, the first respondent sought for extension of the agreement. Notes on Discussion (NOD) was entered on 09.7.1999. The Chennai Port Trust, after obtaining approval of the Government of India for the terms of NOD, forwarded Addendum 1 to the first respondent. But, the first respondent did not accept the same and initiated recovery proceedings against the Chennai Port Trust, for the alleged due towards the services rendered, namely, NLG 35,83,600.20; US$ 1,61,429.56 and Rs.11,90,67,590.16 together with interest.

2.3. By virtue of a Memorandum of Understanding dated 30.3.2002, all the assets and liabilities, including contracts entered into by the Chennai Port Trust in respect of Ennore Port Project, stood transferred in favour of the petitioner, namely, Ennore Port Limited, which is a company in which the Government of India and Chennai Port Trust are the shareholders.

2.4. The petitioner made a counter claim in the arbitral proceedings for recovery of a sum of Rs.50,39,79,779.49/- and US$ 25,445 on account of loss and damages suffered due to the gross negligence and deficiency in the services rendered by the first respondent. Later, the counter claim was revised to Rs.31,97,49,490.70 and US$ 25,445 together with interest at 18% per annum.

2.5. The Arbitral Tribunal passed an award on 11.3.2009 directing the petitioner to pay a sum of Rs.34,47,736.33, US$ 1,61,429.56 and Rs.7,52,20,489.56 together with interest at 12% per annum from 20.5.2002, while rejecting the counter claim of the petitioner. Thereafter, the Tribunal passed an order under Section 33 of the Act on 27.4.2009, correcting the award of Rs.7,52,20,489.56 to Rs.7,85,76,167.12.

2.6. Aggrieved by the said award, the petitioner has come up with this original petition for the relief stated supra.

3. I have heard Mr.K.Manoj Menon, learned counsel for the petitioner, Mr.R.Senthil Kumar, learned counsel for the first respondent and Mr.Krishna Ravindran, learned counsel for the fifth respondent.

4. The learned counsel for the fifth respondent has filed a Memo dated 2.6.2014 to the following effect:

“MEMO FILED ON BEHALF OF THE 5th RESPONDENT

The 5th Respondent submits as follows:-The 5th Respondent states that as per the Memorandum of Understanding dated 30.3.2002 entered into between M/s.Ennore Port Limited, the Petitioner herein and M/s. Chennai Port Trust, the 5th Respondent herein, all the assets and liabilities of the 5th Respondent was transferred to the Petitioner in respect of the Petitioner Port. From that date onwards, the Petitioner becomes the independent entity and the successor of the 5th Respondent in respect of Petitioner Port.

In view of the same, the 5th Respondent is only a formal party and it may be relieved from the above proceedings and thus render justice.

Dated at Chennai this the 2nd day of June 2014.” and pleaded that the fifth respondent is not a necessary party to this proceedings.

5. The learned counsel for the petitioner as well as the first respondent are not disputing the fact that by dint of the Memorandum of Understanding dated 30.3.2002, all the assets and liabilities, including contracts entered into by the Chennai Port Trust in respect of Ennor