M.M. Sundresh, J.

1. A global tender was issued by the appellant on 09.04.1997 inviting bids for development of VII Berth as a container terminal and maintain the same for 30 years on Build, Operate and Transfer Basis.

2. The first respondent submitted its bid on 24.10.1997. The financial offer was submitted on 19.12.1997. As the offer made by the first respondent was the highest, it was accordingly accepted and letter of intent was issued on 29.01.1998 followed by a license agreement dated 15.07.1998. Needless to state that the financial bid of the first respondent formed the consideration in its favour. The payment to be made is by way of royalty. This royalty is based upon the offer made by the first respondent. Now, there are two types of consideration. Royalty is something which is fixed, payable from year to year. The second one is a revenue sharing model. As per this model, the revenue augmented through users is to be shared. Tariff is something which has to be collected from the users.

3. The Tariff Authority for Major Ports (TAMP) was constituted through the institution of Section 47-A to 47-H by appropriately amending Section 48 of the Major Port Trusts Act, 1963 (hereinafter referred to as ‘the Act’). This authority is an expert body in the fixation of tariff. While doing so, it has to take into consideration various factors including the interest of port trusts, licensees, users and general public. This tariff is fixed from time to time by the TAMP. Section 111 of the Act deals with the policy of the Government. Such a policy has got a binding effect on the TAMP.

4. Article 14 of the license agreement defines a law, change of law apart from availing a relief under such a change. These provisions are reproduced hereunder:

“14.1. Definition of Law:

For the purposes of this Agreement, “Law” means any valid act, ordinance, rule, regulation, notification, directive, order policy, bylaw, administrative guideline, ruling or instructions having the force of law enacted or issued by a Government Authority.

14.2. Definition of Change in Law:

For the purposes of this Agreement “Change in Law” means any amendment, alteration, modification or repeal of any existing law by Government Authority or through any interpretation thereof by the Court of law or enactment of any new law coming into effect after the date of this Agreement, provision for which has not been made elsewhere in this Agreement.

14.3. Relief under Change in Law:

If after the date of this Agreement, there is a change in law which substantially and adversely affects the rights of the licensee under this Agreement, so as to alter the commercial viability of the project, the licensee may, by written notice request amendments to the terms of this Agreement.

Subject to provisions of Article 14.3, the licensee shall not be entitled to any compensation whatsoever from the licensor as a result of change in law.”

5. The definition of law, as mentioned above, gives a wider import. However, it should be of a binding nature. It should bind the parties by its operation. The various categories given are to be weighed on the principle of ejusdem generis. Therefore, such an Act and ordinance as the case may be is beyond and de hors the agreement between the parties. A change in law would mean an amendment or alteration, modification or repeal of an existing law. This is by a Government authority. Therefore, the change in law would come in only when there exists a law as defined under Article 14.1 of the license agreement. Such a change in law will have to come into existence after the date of agreement so as to enable the licensee to get the relief provided it adversely affects its rights guaranteed under the agreement.

6. The license agreement inter se parties in clear terms speaks about the payment of royalty. On the contrary, it does not speak anything about royalty becoming an element of cost for fixation of tariff. Thus, the first respondent was quite aware of the exact amoun