Chennai Port wins court battle against DP World

The latest court verdict has effectively reversed the arbitration ruling but according to oceaneus.com, CCT has responded by stating that it will seek a legal remedy following the order.

In 2007, ChPT fined CCT Rs 63 crore (US$10m) for not meeting the targets for three years in a row and subsequently issued a termination notice. The parties then invoked the arbitration clause after the port cashed the terminal’s bank guarantee of Rs 46 crore and demanded another Rs 18 crore and a fresh bank guarantee. The arbitration ruled in favour of CCT, forcing the port trust to refer the matter to the high court.

The original agreement stated that CCT had to ensure non-transhipment output of 20% of the total traffic in its third year; 25% in the fourth; and 30% from the fifth year. Any shortfall would result in CCT paying compensation.