Board Of Trustees Of Chennai Port Trust v. Chennai Container Terminal Private Ltd.

V. Ramasubramanian, J.

1. This is a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an award passed by an Arbitral Tribunal, setting aside a notice of termination of a Concession Agreement and directing the petitioner to refund an amount of Rs. 63,86,21,493/- to the first respondent. I have heard Mr. T.R. Rajagopalan, learned Senior Counsel for the petitioner and Mr. Navroz H. Seervai, learned Senior Counsel for the first respondent.

2. The petitioner is a body corporate constituted under the provisions of the Major Port Trusts Act, 1963. It owns and operates the container terminal in Chennai Port.

3. With a view to develop and manage the Chennai container terminal and to make it a hub port, through Private Sector participation, the Ministry of Surface Transport, Government of India, invited on 20.11.1997, International Parties, to submit their proposals for the project. In response, 3 entities submitted their bids. One of them was a company by name P&O Australia Ports Pty. Ltd., which formed a Consortium along with 3 other companies by name Jakari Express Pvt. Ltd., Mumbai, Meherji Cassinath Ltd., Mauritius and Chettinad Logistics Pvt. Ltd. The bid submitted by the said Australian Company was provisionally accepted. Therefore, the said company along with its Consortium members, floated a Special Purpose Vehicle by name Chennai Container Terminal Limited and the same was incorporated on 12.9.2000.

4. Thereafter, the Board of Trustees of the Port of Chennai, who is the petitioner herein, awarded a licence to the said special purpose vehicle namely Chennai Container Terminal Limited, which is the first respondent herein, under a Concession Agreement dated 9.8.2001. The licence was intended to enable the first respondent herein "to take over the existing container terminal, extended berth and iron ore berth and redesign, design, engineer, finance, erect, operate, replace container handling equipment and maintain and maintain and repair the container terminal".

5. In pursuance of the said licence Agreement, the first respondent took over the container terminal and commenced operations on 30.11.2001. The licence was to be in force for a period of 30 years and was not renewable. As per the agreement, the first respondent was obliged to provide a specific quantity of output in the form of non-transshipment traffic. To ensure that the first respondent performed its obligations in terms of the agreement, Article 5.06 of the licence Agreement required the first respondent to provide a performance bank guarantee, valid for one year at a time. The guarantee was to be renewed year after year, depending upon the anticipated amount of royalty payable for the next year. The last of such guarantees was provided for a sum of Rs. 46.08 crores valid for the period 1.12.2007 to 30.11.2008.

6. In December 2007, the petitioner raised a dispute that the output was not as per the terms and conditions of the agreement. Therefore, by a communication dated 17.12.2007, the petitioner informed the first respondent that the first respondent failed to achieve the required percentage of non-transshipment traffic, as per Article 3.09(a) of the licence Agreement and that therefore, the first respondent should pay an amount of Rs. 63,86,21,493/-.

7. When the correspondence was in progress, the petitioner encashed the performance bank guarantee provided by the first respondent to the tune of Rs. 46,08,00,000/-. Thereafter, the petitioner also issued a notice of intent to terminate the agreement, on 6.3.2008.

8. In an attempt at resolving the dispute, a meeting was held on 10.3.2008 between the representatives of both parties and it was resolved to constitute a Committee to look into the quantum of non-transshipment traffic. Pending final decision, the petitioner demanded from the first respondent, a sum of Rs. 17 crores (after adjusting the bank guarantee amount already encashed) and the petitioner also allowed the first respondent to continue to operate the terminal. Therefore, the first respondent remitted to the petitioner, an amount of Rs. 17,78,21,493/-, on 24.3.2008.

9. But it appears that the Committee so constituted could not arrive at any consensus. In the meantime, the petitioner demanded from the first respondent, a fresh performance bank guarantee, as the existing one had been encashed. The parties also held various meetings to resolve the issue, but to no avail. Therefore, the arbitration clause was invoked and the parties nominated one Arbitrator each. Both Arbitrators appointed the Presiding Arbitrator.

10. The Arbitral Tribunal commenced proceedings, way back in 2008. Eventually, the Presiding Arbitrator and another Arbitrator, by a majority opinion, passed an award to the following effect:-- (1) It is declared that the Claimant has achieved the requisite percentage of Non-Transshipment Traffic in terms of Article 3.09 of the Agreement for the period under consideration. (2) It is further declared that the documents provided by the Claimant for establishing the percentage of non Transshipment Traffic are sufficient and acceptable. (3) The Notice of Intent to Terminate dated 6.3.2008 issued by the respondent on the ground of non-achievement of the requisite minimum percentage of non-transshipment traffic, is set aside. (4) The respondent's demand for Rs. 27,55,42,178/- made on 4.6.2008 and 5.6.2008 as Royalty on the alleged shortfall in Non-Transshipment Traffic for the year 2006-2007, is set aside. (5) The Claimant is entitled to the return of the sum of Rs. 63,86,21,493/- (collected by the respondent by encashing the Bank Guarantee for Rs. 46.08 Crores and compelling Claimant to deposit Rs. 17,78,21,493/-) with interest at the rate of 12% from the date of realization of those sums by the respondent, till the date of the Award. (6) Claimant shall be entitled to recover these sums from the respondent by setting off these sums against the amount of royalty payable by it under Article 5.02 of the licence Agreement. (7) The Counter Claim for Rs. 67,80,90,967/- (as alleged shortfall in the Royalty on the ground of non-achievement of the requisite minimum percentage of non-transshipment traffic and Interest thereon for the years 2003 to 2006, 2006-2007 and 2007-2008) is rejected. (8) The parties shall bear their respective costs.

11. But the third Arbitrator gave a dissenting opinion, rejecting the claim. It must be pointed out that the petitioner also made a counter claim for the failure of the first respondent to achieve the non-transshipment traffic for the previous years 2006-2007 and 2007-2008. The counter claim was rejected both by the majority as well as by the minority. As against the majority opinion, whose award is "the award" in the eyes of law, the petitioner has come up with the above original petition under Section 34.

12. The main grounds on which the petitioner challenges the Arbitration Award are:--

(i) that what is non-transshipment traffic is defined very clearly in Article 3.09 of the licence Agreement and the fact that the first respondent did not achieve the required percentage of non transshipment traffic as quantified therein is well established, but the Arbitrators failed to appreciate the same;

(ii) that the clause relating to non-transshipment traffic was a Non-Negotiable Condition and did not provide any scope for two different interpretations, as sought to be projected by the Arbitrators; and

(iii) that by providing their own interpretation to the expressions "Transshipment" and "Non-Transshipment", the Arbitral Tribunal had virtually rewritten the contract between the parties, overlooking the correspondence that took place between the parties prior to the execution of the licence Agreement.

13. In response to the above contentions, Mr. Navroz Seervai, learned Senior Counsel appearing for the first respondent submitted (i) that the scope of an enquiry under Section 34 is extremely circumscribed by the fact that this Court cannot re-appreciate evidence, cannot sit in appeal, cannot interfere with the interpretation of contractual terms by the Arbitral Tribunal and cannot even interfere on the ground that the understanding of law by the Arbitral Tribunal in a particular way was erroneous; and (ii) that even on facts, the findings of the Arbitral Tribunal cannot be found fault with.

14. I have carefully considered the rival submissions. Since almost a period of 17 years have passed from the enactment of the Arbitration and Conciliation Act, 1996 and also since the 1996 Act actually curtailed and narrowed down the scope of jurisdiction of this Court to interfere with an arbitral award, the principles governing the same are almost well settled. Therefore, before proceeding further, let me elicit those principles for the sake of convenience and for the purpose of refreshing the memory. SCOPE FOR INTERFERENCE UNDER SECTION 34:

15. The scope for interference with an arbitral award are-

(i) that this Court cannot re-appreciate evidence [see Ravindra Kumar Gupta v. Union of India (AIR 2010 SC 972)];

(ii) that reasonableness of the reasons given by the Arbitrators cannot be challenged and there is no power for reappraisal of evidence [see Sudarsan Trading Co. v. The Government of Kerala (AIR 1989 SC 890)];

(iii) that once there is no dispute as to the contract, what is the interpretation of that contract is a matter for the Arbitrator and the Court cannot substitute its decision thereupon [see Sudarsan Trading Co. v. The Government of Kerala (: AIR 1989 SC 890)];

(iv) that the power of this Court under Section 34 is not the same as that of an Appellate Court [see Lal Builder v. Union of India

(v) that the Arbitrator is the sole Judge of quality and quantity of evidence adduced and the approach of the Court should be to support it rather than destroy it [see Tamil Nadu Civil Supplies Corporation Ltd. v. G.S.N. Exporters, 2008 (1) TLNJ 603)];

(vi) that the Arbitrator is the sole Judge of the facts as well as law and had the right to interpret the contract and that the Court cannot substitute its own opinion for that of the Arbitral Tribunal with regard to quality, quantity and appreciation of evidence, import of documents and interpretation of contract [see Samho Gunyoung Co. Ltd. v. Flakt (India) Ltd. and

(vii) that the interpretation of a contract may fall within the realm of the Arbitrator and the Court will not interfere unless the reasons adduced by the Arbitrator are found to be perverse or based on wrong proposition of law [see G. Ramachandra Reddy v. Union of India, 2009 (6) SCC 414)].

16. But, a word of caution was signaled in State of Rajasthan v. Puri Construction Co. Ltd. : 1994 (6) SCC 485], wherein the Supreme Court pointed out, even while making a useful reference to the decision in Kapoor Nilokheri that the court can set aside the award, if it is apparent from the award that there is no evidence to support the conclusions or if the award was based upon any legal proposition, which is erroneous. Though the Supreme Court also noted in that case that by and large the Courts disfavoured interference with the arbitration award, the Court made some serious observations, which I think are of relevance. In paragraph 31 of the report, the Supreme Court stated the following: As reference to arbitration of disputes in commercial and other transactions involving substantial amount has increased in recent times, the courts were impelled to have fresh look on the ambit of challenge to an award by an Arbitrator, so that the award does not get undesirable immunity. In recent times, error in law and fact in basing an award has not been given the wide immunity as enjoyed earlier, by expanding the import and implication of "legal misconduct" of an Arbitrator, so that the award by the Arbitrator does not perpetrate gross miscarriage of justice and the same is not reduced to mockery of a fair decision of the lis between the parties to arbitration.

17. Eventually in Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. [ 2003 (5) SCC 705], the Supreme Court evolved the following principles:

(i) that in view of the mandate contained in Section 28(1)(a) of the Arbitration and Conciliation Act, 1996, the Arbitral Tribunal is obliged to decide a dispute in accordance with the substantive law of India, that includes the Indian Contract Act, the Transfer of Property Act and other such laws in force;

(ii) that if the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal calling for interference under Section 34; and

(iii) that the phrase "Public Policy of India" appearing in Section 34 should be given a wide meaning, so as to include within its fold, the fundamental policy of India, the interest of India, justice or morality and patent illegality.

18. In Hindustan Zinc Ltd. v. Friends Coal Carbonisation [ 2006 (4) SCC 445], the Supreme Court reiterated the principles laid down in Oil and Natural Gas Corporation. The Court held that as per the law laid down in Saw Pipes, it is open to the Court to consider whether the award is against the specific terms of the contract or not.

19. Keeping in mind the above fundamental principles, let me look into the factual setting in which the dispute between the parties has arisen. FACTUAL MATRIX:

20. As pointed out earlier, the petitioner granted a licence to the first respondent for "taking over the container terminal, extended berth and iron ore berth and to redesign, design, engineer, finance, erect, operate, replace container handling equipment and maintain and repair the container terminal" for a period of 30 years with effect from 30.11.2001. The obligations of the Licensor (the petitioner herein) and the licensee (the first respondent herein) were detailed in Article 2 of the licence Agreement. But under Article 3, the details of the project, its requirements and rights and obligations were spelt out. Under the said Article, the first respondent was obliged to prepare designs and drawings, get them approved by an independent Engineer and also invest a specified amount on civil works and state-of-the-art equipments. Thereafter the first respondent was obliged to undertake construction. After constructions are completed, the operations and maintenance phase of the contract would come into force.

21. The marketing and commercial obligations on the part of the first respondent are indicated in Article 3.09 of the licence Agreement. The said Article reads as follows:-- 3.09 Main Line Vessels a. The licensee shall develop Chennai as a Hub Port and ensure that within 3 years from the date of Commercial Operation, Main Line Vessels also call on the Port. It shall be condition of the Licence that the following minimum throughput shall be contributed by the non-transshipment traffic i.e., containers not transshipped in the neighbouring ports of Colombo, Singapore, Port Klang, Dubai and Salalah. Failure on the part of the Licensee to bring in the following percentage of non-transshipment traffic consecutively for a period of 3 years shall attract termination as per Article 10.01(a)(viii)(m). - 20% of Total Traffic in the 3rd year. - 25% of Total Traffic in the 4th year and - 30% of Total Traffic from the 5th year onwards b. In the event of shortfall in the non-transshipment traffic, the Licensee shall pay the Licensor compensation equivalent to the amount of royalty payable by the Licensee on the shortfall in the traffic. c. The intention of the Licensor to develop Chennai as a Hub Port is not to provide only for direct sailing between neighbouring ports and Chennai. The purpose of privatisation of the terminal is to develop Chennai as a Hub Port and not to get compensation for the failure of the Licensee to fulfil his commitments. If the Licensee cannot develop the Chennai as a Hub Port, the Licensor shall be at liberty to terminate the License.

22. As I have pointed out in the preface, the licence Agreement was actually a sequel to the policy evolved by the Government of India for the development and management of the container terminal as a Hub Port, through Private Sector Participation. Even at that time, the Government of India had stipulated some conditions as Non Negotiable Conditions, subject to which the Private Sector Participation was encouraged. Article 3.09 of the licence Agreement was not merely a reproduction of the Non Negotiable Conditions, but something more than that. This can be well understood by condition No. 2 of the Non Negotiable Conditions, that ultimately became Article 3.09. Therefore, condition No. 2 of the Non Negotiable Conditions, is extracted as follows:--

2. Main Line Vessels. a. The Licensee will develop Chennai as a Hub Port and ensure that, within 3 years, main line vessels also call on the Port. It will be condition of the License that the following minimum throughput will be contributed by the non-transshipment traffic i.e., containers not transshipped from the neighbouring ports of Colombo, Singapore, Port Klang, Dubai and Salalah. - 20% of Total Traffic in the 3rd year. - 25% of Total Traffic in the 4th year and - 30% of Total Traffic from the 5th year onwards b. In the event of shortfall in the non-transshipment traffic, the Licensee will pay the Port Trust compensation equivalent to the amount of royalty payable by the Licensee on the shortfall in traffic.

23. The pre-contractual correspondence also focused attention only on this commercial aspect. The learned Senior Counsel for the petitioner invited my attention to some of the pre-contract correspondence, which were marked as exhibits before the Arbitral Tribunal. But the learned Senior Counsel for the first respondent objected to any reference to the pre-contract correspondence on the ground that after the correspondence fructified into a contract, the correspondence cannot be looked into. Before considering the said objection, I shall first deal with the said correspondence.

24. It appears that by letters dated 3.5.2000 and 11.5.2000, P&O Australia Ports Pty. Ltd., which led the Consortium that ultimately gave birth to the first respondent as a special purpose vehicle and bagged the award of the contract, raised certain queries about the commercial terms. By a reply dated 17.5.2000, the Director (Ports Development), communicated to the Leader of the Consortium, the reply of the Ministry to the clarifications sought by them. Two questions which are of relevance for the case on hand and the reply provided by the Ministry are as follows:-- Query: The condition on non-transshipment cargo is a very unusual requirement. The Port operator has no commercial leverage with Shipping Lines. The only way the lines can be induced to bring the main line vessels to Chennai is through contracts that give them preferential treatment. Ministry's Reply: As per non-negotiable conditions, the licensee is to manage and operate the terminal on a common user non discriminatory basis. The conditions cannot be diluted. Query: The penalty for shortfall in non-transshipment cargo is very severe and may be deleted, as the penalty will be duplicated since already there is a penalty clause for shortfall in traffic. (Condition 5.4). Ministry's Reply: This has been included to ensure that the Licensee fulfills the commitment of bringing the main line vessels. The condition cannot be deleted.

25. It appears that before the terms and conditions of the Concession Agreement (which is also called the 'licence Agreement') were finalised, several rounds of discussion were held between the petitioner and the Leader of the Consortium. In a meeting held on 5.12.2000, the Minutes of which were confirmed by a letter dated 13.12.2000, the Leader of the Consortium made a request to the petitioner to amend Article 3.09(b) of the proposed Concession Agreement. The amendment suggested by them in their letter dated 13.12.2000, is as follows:-- Article 3.09(b) We suggest that the double negative in Clause 3.09(b) is confusing the meaning of the clause, which could be improved to read as follows: The following minimum throughput shall be contributed by the traffic of containers not transshipped from the neighbouring ports of Colombo, Singapore, Port Klang, Dubai or Salalah provided that origin and destination cargo between any of those ports and Chennai shall be counted towards this minimum requirement....

26. However, by a reply dated 20.12.2000, the petitioner informed the Leader of the Consortium, as follows:-Article 3.09(b) This clause has been framed strictly adhering to the wordings of relevant clause of NNC and hence your suggestion to modify the clause would amount to dilution and violation of NNC.

27. Thereafter, the parties seem to have exchanged draft model documents and a model Concession Agreement. The model Concession Agreement was also referred to a firm of Solicitors for opinion and discussions were held on 18.1.2001, as recorded in a letter dated 24.1.2001 sent by the petitioner to the Ministry. In the said letter dated 24.1.2001, sent by the petitioner to the Government of India, seeking the advice of the Government of India on certain issues, the draft of Article 3.09 finds a prominent place. The relevant portion of the letter dated 24.1.2001 reads as follows:-- Part-I, Item-2: Main Line Vessels of Non-Negotiable Conditions (Article 3.09 - Main Line Vessels) The item Part-I (2) Main Line Vessels of Non-Negotiable Conditions (NNC) is as under: The Licensee will develop Chennai as a Hub Port and ensure that, within 3 years, main line vessels also call on the Port. It will be condition of the License that the following minimum throughput will be contributed by the non-transshipment traffic i.e., containers not transshipped from the neighbouring ports of Colombo, Singapore, Port Klang, Dubai and Salalah - 20% of Total Traffic in the 3rd year - 25% of Total Traffic in the 4th year and - 30% of Total Traffic from the 5th year onwards In the event of shortfall in the non-transshipment traffic, the Licensee will pay the Port Trust compensation equivalent to the amount of royalty payable by the Licensee on the shortfall in traffic. For this, P&O have requested to amend NNC item (i) above from the third line (Article 3.09 of Draft CA of the Port) to read as under: the following minimum throughput shall be contributed by the traffic of containers not transshipped from the neighbouring ports of Colombo, Singapore, Port Klang, Dubai or Salalah provided that origin and destination cargo between any of those ports and Chennai shall be counted towards this minimum requirement..." Please seek Ministry's advice on the above request of P&O.

28. The Ministry replied by a letter dated 14.2.2001, the relevant portion of which reads as follows:-- S. No. 3: Part-I, Item-2: Main Line Vessels of Non-Negotiable Conditions (Article 3.09-Mainline Vessels) We agree that this should not be accepted. The intention of developing Chennai as a hub port is not to provide only for direct sailing between neighbouring ports and Chennai.

29. Eventually, Article 3.09 was incorporated in the licence Agreement dated 9.8.2001 in the form in which it now appears. I have already extracted Article 3.09 in paragraph 22, as it appears in the licence Agreement.

30. In 2008, after about 7 years of the coming into force of the licence Agreement, the petitioner issued a notice of intent to terminate on 6.3.2008. The reason for termination was that the first respondent did not achieve the minimum percentage of non-transshipment traffic, consecutively for a period of 3 years. The notice of intent to terminate gave the following statistics, for invoking Article 3.09. The achievement of non-transshipment traffic to total traffic as per the records available in the Port Trust is as follows:-- Year (Total Non-Transshipment in TEU's) Total TEUs Non-Transshipment traffic to total traffic Non-Transshipment traffic to be achieved as per Article 3.09(a) Deficit in performance 2003-2004 30128 596482 5.05% 20% -14.95% 2004-2005 32467 685760 4.73% 25% -20.27% 2005-2006 31026 815411 3.80% 30% -26.20% The above table clearly indicates that the Licensee had not achieved the minimum percentage of non-transshipment traffic consecutively for a period of three years from the third year onwards.

31. But, the claim of the first respondent was that they had achieved the prescribed output of non-transshipment traffic and that the claim of the petitioner was basically due to a misunderstanding of the scope and meaning of Article 3.09. According to the first respondent, the Main Line Vessels commenced calling at the Chennai container terminal from June 2002 and that more than 500 Main Line Vessels had called at the terminal and that they had achieved a minimum throughput as prescribed by the contract. According to the first respondent, they had paid a sum of Rs. 468 Crores to the petitioner by way of royalty upto 31.7.2008. The first respondent claims that in terms of Article 3.09(a), the containers originating from and destined to any ports, including anyone of the 5 ports named in Article 3.09(a) directly from/to the terminal are non-transshipment containers and they do not fall within the purview of the meaning of transshipment as set out in Article 3.09. The statistics provided by the petitioner, which I have extracted in a previous paragraph, according to the first respondent, exclude the containers from non-transshipment volumes. This, according to the first respondent, accounted for the shortfall.

32. Before the Arbitral Tribunal, the petitioner claimed that by investing a sum of Rs. 625 crores, the first respondent earned a sum of Rs. 736 crores and generated a revenue of Rs. 1,186 crores. It was also claimed by the petitioner before the Arbitral Tribunal that the definition of transshipment contained in Article 3.09 had to be read along with the definition of Hub Port and Main Line Vessels and that all sub-clauses of Article 3.09 should be read together. In other words, the case of the petitioner before the Arbitral Tribunal was that non-transshipment traffic is that transport in which the containers go beyond the 5 neighbouring ports without transshipment at any of the said 5 ports. The containers which do not go beyond the said 5 ports, according to the petitioner, had to be termed as "others".

33. Before the Arbitral Tribunal, the first respondent examined 3 witnesses, one of whom was supposed to be an expert in the Shipping Industry. The petitioner examined two witnesses. Both parties filed several documents.

34. Throughout the award, the majority of the Arbitral Tribunal recorded that the dispute before them concerned the true meaning and scope of Article 3.09 of the agreement. In paragraph 1.30 of the award, the Arbitral Tribunal stated that the dispute on hand was regarding the true meaning and scope of Article 3.09. In paragraph 4.1.4 of the award, the Arbitral Tribunal indicated that the claimant (first respondent herein) bifurcated the dispute into (i) interpretative issue and (ii) process validation for calculation of traffic. Again in paragraph 4.2.2, the Arbitral Tribunal recorded that the core dispute concerned Article 3.09. In paragraph 4.3.5 also, the Arbitral Tribunal discussed the question of interpretation of Article 3.09. Therefore, in the whole of paragraph 6, the Arbitral Tribunal dealt only with the manner in which Article 3.09 had to be interpreted.

35. In those circumstances, it is the contention of the learned Senior Counsel for the first respondent that the interpretation given by an Arbitral Tribunal to the terms and conditions of the contract, cannot be interfered with by the Court under Section 34.

36. But, drawing my attention to the dissenting view expressed by the minority, Mr. T.R. Rajagopalan, learned Senior Counsel for the petitioner submitted that Article 3.09 was very clear to the effect that direct transport of containers between Chennai and any one of the 5 neighbouring ports, did not constitute non-transshipment traffic. In other words, the minority Arbitrator did not see any necessity for any extraneous aid for interpreting Article 3.09 of the agreement. However, the learned Senior Counsel for the first respondent submitted that the Court cannot even consider the minority view, while dealing with an application under Section 34.

37. Therefore, I have to first consider (i) whether the views of the minority can be taken into account at all; (ii) whether the pre-contract correspondence can never be looked into at all; and (iii) whether Article 3.09 of the contract required any interpretation, so as to give rise to an arbitrable dispute at all or not. RELEVANCE OF THE VIEWS OF THE MINORITY:

38. Relying upon the decision of the Delhi High Court in Fertilizer Corporation of India v. I.D.I. Management ( AIR 1984 Del. 333), Mr. Navroz Seervai, learned Senior Counsel contended that even in cases where the majority awards are non-speaking, it is not open to the Court to look into the opinion of the Minority Arbitrator. In that case, the Delhi High Court proceeded to hold in para 18 of the report that the reasons given by the Minority Arbitrator cannot be said to be the reasons of the majority and that the minority reasons do not form part of the award. After referring to Section 10(2) of the Arbitration Act of 1940, the Division Bench of the Delhi High Court held in para 20 of Fertilizer Corporation, "that the opinion of the minority cannot be looked at for any purpose".

39. A similar view was expressed by a Division Bench of the Bombay High Court in Chowgule Brothers v. Rashtriya Chemicals and Fertilizers (2006 (3) Arb.L.R. 457 (Bom.)), where the Court held that it is not permissible to look at the minority award. The Court also held in that case that the majority award can be set aside only on the basis of what is stated therein and not on the basis of what is stated in the minority award. The Court quoted with approval the decision of the Delhi High Court in Fertilizer Corporation.

40. But in Numaligarh Refinery Limited v. Daelim Industrial Co. Ltd. [ 2007 (8) SCC 466], the Supreme Court made it clear that though ordinarily the Courts shall not substitute their interpretation of the terms of the contract for that of the Arbitrator, the Courts are not prohibited from interfering in cases where the Arbitrator acted without jurisdiction and put such an interpretation on the clauses of the agreement, which is wholly contrary to law. Interestingly, in that case, a clause relating to 'price, scope and basis' contained in the contract was interpreted in a particular manner by the majority. But, the Supreme Court found that the minority view expressed by Justice M.M. Dutt, who was one of the Arbitrators was correct. In paragraph 23 of the report, the Supreme Court approved the minority view taken by the Arbitrator as well-founded. An argument was advanced before the Supreme Court that the court should not interfere with an interpretation given by the Arbitral Tribunal to the terms of the contract. But, the Supreme Court pointed out that in that case, there was a variation of views and that while the majority award took one view, the minority award took another view and the District Judge, before whom the petition came up, had taken the third view and the same was set aside by the High Court with a fourth view. Therefore, the contention that the minority view cannot be looked at for any purpose, falls to ground by virtue of the decision of the Supreme Court in Numaligarh.

41. In Axios Navigation Co. Ltd. v. Indian Oil Corporation Limited [ 2012 (4) R.A.J. 404 (Bom.)], a learned Judge of the Bombay High Court referred to the decision of the Delhi High Court in Government of India v. M/s. Acome [AIR 2000 Del. 102] as well as the decision of the Division Bench of the Bombay High Court in Chowgule Brothers, wherein it was pointed out that the minority view cannot be looked at for any purpose. But, after taking note of the difference between the 1940 act and the 1996 act, the learned Judge of the Bombay High Court opined that the losing party is always entitled to draw inspiration and support from the minority view and that wherever there is conflict of views, it is always useful to refer to the minority view, as it provides another dimension to the same issue.

42. Though the question whether the views of the minority Arbitrator can be looked into or not was not discussed in great detail, the Delhi High Court set aside majority award, in Indian Acrylics Limited v. E.I. Du Pont De Nemours [ 2013 (1) R.A.J. 659] on the ground that the claims allowed by the majority were barred by limitation.

43. Many times, what was once a minority view, turns out to be the correct view, accepted by the majority, at a later point of time. If we understand this as a process which is continuous and dynamic and if we call it "a development of law", then there cannot be any objection to a reference to the minority view. RELEVANCE OF PRE-CONTRACT CORRESPONDENCE:

44. Though English Law was by and large to the effect that once a contract comes into existence, the pre-contract correspondence loses its significance and hence cannot be looked into for the purpose of finding out the intention of the parties, the Indian Law appears to have taken a small deviation. Though the reasons for such deviation are not spelt out very clearly in any of the decisions, I think the reasons are too obvious to state. The advantage that the English draftsman had was that both contracting parties in England could think in their mother tongue, communicate with each other in their own mother tongue and enter into a contract in the same tongue in which they thought and spoke. But, in India, the situation is completely different. The contracting parties, if hailing from different regions even within the country, had to go through a thought process in their own mother tongue, translate them into commercial terms in a foreign tongue, namely English and then have their own communications reduced into writing in English, and that too through a third party. Therefore, I find that we cannot import the straight jacket formula adopted by the English Courts with regard to the admissibility of pre-contract correspondence.

45. In Asaram v. Ludheshwar (AIR 1933 Nag. 335), a Full Bench held with reference to Section 92 of the Evidence Act that Section 92 does not preclude a party from showing that what was in writing was not really the contract between the parties. Though the said observation was with reference to fictitious and colourable devices, such as benami transactions, the emphasis laid by the Full Bench was with reference to surrounding circumstances.

46. A Division Bench of Gujarat High Court pointed out in Heirs of late Jatashanker Fulchand Mehta v. Heirs of Late Mavji Trikarn ( AIR 1969 Guj. 169) the fine distinction between an attempt to prove that the transaction itself was different from the one indicated in writing and an attempt to prove that the terms of the transaction were different from the one inferred from the language. Start

47. In Central Bank of India v. Hartford Fire Insurance Co. Ltd. (AIR 1965 SC 1288), the Supreme Court indicated that the Court must be able to say with certainty what the intention was, not that it may add something to the language used by the parties. However, the Court cautioned that plain and categorical language cannot be radically changed by relying upon the surrounding circumstances.

48. Even in Commercial Auto Sales Private Limited v. Auto Sales (Properties)) [2009 (9) SCC 620], the Supreme Court pointed out that the intention of the parties to an instrument must be gathered from the terms thereof, in the light of the surrounding circumstances. The Court cited with approval, its earlier decision in Union Of India v. Millenium Mumbai Broadcast (P) Ltd.. [ 2006 (10) SCC 510], where it was held that a document must be construed having regard to the terms and conditions as well as the nature thereof.

49. In Mcdermott International v. Burn Standard Co. Ltd. [(2006) 11 SCC 18], the Supreme Court referred to its earlier decisions in Pure Helium v. ONGC [(2003) 8 SCC 593] and D.D Sharma v. Union Of India [(2004) 5 SCC 325] and held as follows: It is trite that the terms of the contract can be expressed or implied. The conduct of the parties would also be a relevant factor in the matter of consideration of a contract.... It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. I should also point out here that in Mcdermott, the Supreme Court reiterated that interpretation of a contract is a matter for the Arbitrator to determine even if it gives rise to determination of a question of law.

50. In Bank of India v. K. Mohandass [(2009) 5 SCC 313], the Supreme Court again held that the true construction of a contract must depend upon the import of the words used and not upon what the parties choose to say afterwards or before. The Court made it clear that subsequent conduct of the parties in the performance of the contract would not affect the true effect or the clear and unambiguous words used in the contract. But, nevertheless, the Court made it clear in paragraph 28 of the opinion that the intention of the parties must be ascertained from the language they had used, considered in the light of the surrounding circumstances and the object of the contract. Interestingly, the last observation in paragraph 28 is of great significance and it reads thus: The nature and purpose of the contract is an important guide in ascertaining the intention of the parties. Therefore, it appears that the opinion of the Court on this aspect, developed stage by stage. From the original position of strict adherence to the language employed in the contract, the Courts moved on to the stage of considering the surrounding circumstances. From that stage, the Courts appeared to have moved towards looking into the correspondence between the parties that took place before the contract. Ultimately, in Bank of India, the Court has moved over to the question of "the object of the contract".

51. In G. Ramachandra Reddy and Co. v. Union of India [ 2009 (6) SCC 414], the Supreme Court pointed out that an award can be interfered, if it is based on a wrong proposition of law. One more aspect in G. Ramachandra Reddy is that the Arbitrator was found by the Court in that case to have taken into consideration the correspondence that took place between the parties, that constituted offer and acceptance.

52. Therefore, it is clear that there is no absolute embargo for looking into the pre-contract correspondence, for finding out the matters on which the parties were ad idem. As a matter of fact, the minority Arbitrator relied upon the sixth proviso to Section 92 of the Evidence Act and I think that is the correct exposition of law, with regard to the pre contract correspondence, as seen from the decisions listed above. WHETHER THERE WAS SCOPE FOR INTERPRETATION OF ARTICLE 3.09:

53. The next question is as to whether there was any need or scope for interpretation of Article 3.09 of the contract.

54. In Durga Prasad Chamria v. Sewkishendas Bhatter (AIR 1949 PC 334), the Privy Council indicated that when the parties had expressly agreed to refer the question of law as to interpretation of the contract, to Arbitrators and the Arbitrators had expressed an opinion one way or the other, it is not open to the Court to interfere with such an opinion, even if the Court itself would have taken a different view, if such a question of law had arisen before it. This decision was cited with approval by the Supreme Court in K.N. Co-operative Society Ltd. v. Union of India (1973 (1) SCC 708). This view continues to hold the field, as seen from the decision of the Supreme Court in U.P. Hotels Ltd. v. U.P. State Electricity Board (AIR 1989 SC 268), where the Supreme Court pointed out that if a specific question of construction of a contract, which is generally a question of law is submitted for adjudication to an Arbitrator, the opinion of the Arbitrator thereon cannot be set aside by the Court. But the Supreme Court also qualified its opinion by adding towards the end of para 17 of the report that "if it appears on the face of the award that the Arbitrator had proceeded illegally, as for instance, by deciding on evidence which was not admissible or on principles of construction which the law does not countenance, there is error in law which may be a ground for setting aside the award".

55. The learned Senior Counsel for the first respondent also invited my attention to the judgment of a Division Bench of the Delhi High Court in Ansal Properties v. HUDCO (2013 (1) Arb.L.R. 345 (Del.)), where the Delhi High Court relied upon another judgment of the Supreme Court in Seth Thawardas Pherumal v. Union Of India (AIR 1955 SC 468). In that case, the Supreme Court drew a distinction between cases in which a question of law is specifically referred and those in which a decision on a question of law is incidentally material, in order to decide the question actually referred. While holding that whenever a question of law is specifically referred by the parties with a desire to have a decision from the Arbitrator, the Court will not interfere with the decision of the Arbitrator unless it is apparent that the Arbitrator acted illegally by deciding on inadmissible evidence or on principles of construction not countenanced by law.

56. In Union of India v. Best Cast Construction (Pvt.) Ltd. (2010 (2) MWN Civil 349), a Division Bench of this Court, after referring to the decision of the Supreme Court in Numaligarh Refinery Ltd. v. Daelim Industrial Company Ltd. (2007 (8) SCC 466), held that while an Arbitrator is entitled to interpret a clause in the contract, he has to act within his jurisdiction. If the construction is within his jurisdiction and with reference to the terms of the contract, as such, the Court should not interfere, even if another construction is possible. But, when the construction made by the Arbitral Tribunal would tantamount to an act without jurisdiction or an interpretation on the clause of the agreement which is wholly contrary to law, the Court would be entitled to set things right.

57. In National Highways Authority of India v. Som Datt Builders [2010 (4) R.A.J. 352], a Division Bench of the Delhi High Court also pointed out that if the interpretation adopted by the Arbitral Tribunal in respect of contractual terms, is so unreasonable, so unfair as to shock the conscience of the court, the illegality is one, which goes to the root of the matter and that the court would be justified in interfering with the same. Eventually, in that case, the Division Bench of the Delhi High Court set aside the award as opposed to public policy on the ground that the interpretation adopted by the Arbitral Tribunal in respect of the contractual clauses was patently uncalled for, implausible, unfair, unreasonable, erroneous and illegal and that the interpretation shocked the conscience of the court.

58. Keeping the above principles in mind, let me get back once again to the facts of the case.

59. In brief, the dispute between the petitioner and the first respondent was as to what constituted non transshipment traffic. According to the first respondent, the containers originating from and destined to any ports including any one of the five ports directly from/to the first respondent's terminal are non transshipment containers and do not fall within the purview of transshipment as set out in Article 3.09 of the License Agreement. According to the petitioner, non transshipment traffic means that the containers should go to the final destination without any transshipment in any one of the five neighbouring ports such as Colombo, Singapore, Port of Klang, Dubai and Salalah. In other words, the claim of the petitioner is that the concept of non transshipment traffic would be that the containers should go beyond the five neighbouring ports and vice versa without transshipment in the said five ports.

60. The Arbitral Tribunal framed 15 issues as arising for consideration in the proceedings. They are:

1. Whether the arbitration is premature when the claimant has sought for a committee and committee is seized of the matter?

2 (a). What does the term 'non transshipment container' mentioned in Article 3.09 of the License Agreement mean and constitute? (b). Whether the containers originating in and destined for the five neighbouring ports mentioned in Article 3.09 would constitute non transshipment containers?

3 (a). Whether the documents relied upon by the claimant for establishing volumes of non transshipment containers handled, namely the IGM (Import General Manifest), the VIA (Vessel Identification Advice), the IAL (Import Advance List) and the Form 13, are sufficient for establishing the non transshipment nature of the containers? (b) Whether the respondent is estopped by its own conduct from claiming that the documents i.e. the IGM, the VIA, the IAL and the Form 13 which were provided by the claimant to the respondent are not sufficient for establishing the non transshipment nature of the containers? 4(a). What is the meaning to be applied to the term 'authenticated' document in the context of the dispute? (b) Whether the authentication of the IAL by the issuing entity, namely the concerned vessel operator, is sufficient authentication of the documents?

5. Whether the claimant has brought 500 Main Line Vessels? If so, whether Year wise/Vessel wise details could be furnished along with the transshipment/non transshipment status of the containers?

6. Whether the claimant has complied with the requirements and obligations under Article 3.09 of the Licence Agreement?

7. Whether the respondent has provided and proved its calculations for arriving at the percentage of non transshipment containers? 8(a). Whether there has been on the part of the claimant, non-achievement of the requisite minimum percentage of non transshipment traffic, under the provisions of the License Agreement? (b) Whether the respondent was entitled to issue the 'notice of intent to terminate' dated 6th March 2008 on the ground of non-achievement of the requisite minimum percentage of non transshipment traffic under Article 3.09 of the License Agreement? (c) Whether the respondent has followed the procedure for a 'notice of intent to terminate' as provided for in Article 11.01 of the License Agreement? 9(a). Whether the respondent is entitled to encash the performance security bank guarantee? (b) Assuming that the respondent was entitled to encash the performance security bank guarantee, has the respondent followed the requisite procedure under the License Agreement before invoking the bank guarantee? 10(a). Whether the claimant is entitled to return of the entire amount of Rs. 63,86,21,493/- by the respondent, together with interest thereon as claimed in the Statement of Claim? (b) Whether the respondent is entitled to retain the amount of Rs. 46.08 Crores appropriated by invocation of the performance guarantee No. GTEBOM030058 furnished by the claimant under the provisions of Article 5.01 of the License Agreement? (c) Whether the respondent is entitled to retain the amount of Rs. 17,78,21,493/- deposited without prejudice with the respondent by the claimant?

11. Whether the claimant is entitled to raise the demand for Rs. 27,55,42,178/- faxed to the claimant on 5th June 2008 or any other or further demand on the ground of shortfall in non transshipment traffic?

12. Whether the respondent is eligible for claiming compensation for the failure to achieve NTT by the claimant?

13. Whether the respondent is entitled to counter claim and cost?

14. Whether the interest sought by the respondent by its letter dated 17th December 2008 is payable as claimed, or at all?

15. Relief and costs.

61. It may be seen from the above that the second issue and the sixth issue are the actual issues that held the key to the decision on the other issues. The findings of the majority as against the findings of the minority on these two issues, are presented in a tabular column form for easy appreciation: Issue No. Majority View 2(a) Non transshipment container for the purpose of Article 3.09 of the License Agreement is a container forming part of the total traffic of the Chennai Container Terminal, which has not been transshipped at any of the five neighbouring ports of Colombo, Singapore, Port Klang, Dubai and Salalah. I hold that 'transshipment containers' means the containers transshipped from one vessel to another at an intermediate Port, that is, a Port between the Port of origin and the Port of destination, for further transportation to their destination. 2(b) Containers originating in and destined for the five neighbouring Ports mentioned in Article 3.09 would constitute non transshipment containers as under that Article all containers handled at the terminal which do not undergo transshipment at the five neighbouring ports constitute non transshipment traffic. I find that containers originating from Chennai destined to any one of the five neighbouring Ports and vice versa do not constitute 'non transshipment containers'. 6 Article 3.09 of the License Agreement deals with development of Chennai as Hub Port; ensuring that Main Line Vessels call at the Port; and the Licensee ensuring that the prescribed minimum throughput shall be contributed by non transshipment from the 3rd year onwards. Evidence on record has established that claimant has fulfilled its non transshipment obligations under Article 3.09(a). The evidence on record shows that respondent has, on its website described this Container Terminal as a Hub Port for containers. There is also evidence that Main Line Vessels have called at the Terminal within the period specified in Article 3.09. It is therefore held that claimant has fulfilled the requirements and obligations under Article 3.09 of the License Agreement. I hold that the claimant has failed to comply with the minimum throughput requirement of 'non transshipment traffic' stipulated in Article 3.09 of the License Agreement. REASONS GIVEN BY THE MAJORITY FOR ITS CONCLUSION:

62. For coming to the conclusion that containers originating in and destined for the 5 neighbouring ports would constitute non-transshipment containers and that all containers handled at the terminal which do not undergo transshipment at the 5 neighbouring ports constitute non-transshipment traffic, the majority took the following route:--

(i) The object of Article 3.09 was to develop Chennai container terminal as a hub port and to ensure that within 3 years from the date of commercial operation, Main Line Vessels also call on the port.

(ii) In view of the admitted position that 500 Main Line Vessels have come to Chennai container terminal between 2001 and 2008 and also in view of the claim made by the Chennai Port Trust in its own website that it had become a hub port with 3 ducts, 23 berths and drafts ranging from 12 meters to 16.5 meters, it had actually become a hub port.

(iii) In any case, the notice of intent to terminate, is not on account of the number of Main Line Vessels that called or did not call at the port.

(iv) The expression "transshipment" and the very concept of transshipment is indicated clearly in Wikipedia as well as in Online Web Resources to mean an intermediate destination where the containers are staked when on transit from one port to another.

(v) The Merriam Webster Dictionary, Business Dictionary Online and the Oxford English Dictionary also give similar meanings to the expression "trans" and "shipment".

(vi) Non-transshipment, for the purpose of Article 3.09 is linked only to containers not transshipped in the 5 neighbouring ports. Consequently, it is only containers transshipped in the 5 named neighbouring ports that are regarded as transshipment traffic for the purpose of this Article and hence required to be excluded from any computation of non-transshipment traffic.

(vii) In other words, the entire throughput excluding the containers transshipped at the 5 named ports would constitute non-transshipment traffic. As a corollary, the containers originating from and finally destined to these named 5 neighbouring ports would constitute non-transshipment containers.

(viii) In view of the fact that Non Negotiable Conditions and Article 3.09 are identical, the antecedent negotiations are not to be looked into when the agreement itself is clear.

(ix) Article 3.09(c) does not state that direct sailings between the 5 named neighbouring ports and Chennai are to be excluded from the computation of non-transshipment traffic, even when the containers are transshipped at these ports.

(x) The intention to develop Chennai as a hub port, is not with a view to exclude direct sailing between neighbouring ports and Chennai.

(xi) The words chosen to be incorporated in the agreement do not convey the intention canvassed by the petitioner, even it be in the mind of the Licensor (petitioner herein).

(xii) The conduct of the parties as well as the surrounding circumstances also do not warrant an interpretation other than the one ascertained from the words used in the Article.

(xiii) The recourse to contemporaneous events or documents is permissible only where the language of the contract is ambiguous. But under the guise of clearing ambiguity, the Courts cannot rewrite the contracts, however, reasonable or unreasonable the existing one may be.

(xiv) It is the bargain entered into between the parties that is to be actually given effect to and not the function of the adjudicating body to make a contract. REASONS GIVEN BY THE MINORITY FOR ITS CONCLUSION:

63. For coming to the conclusion that direct transport of containers between Chennai and anyone of the 5 neighbouring ports does not constitute non-transshipment traffic, the minority adopted the following reasons:--

(i) The expression "Main Line Vessel" is defined in Article 1.01 of the agreement to mean "large container vessel plying between hub ports without any intermittent transshipment in the neighbouring ports". This definition postulates that the Main Line Vessel shall ply between hub ports without any transshipment in any of the 5 neighbouring ports.

(ii) Clause (c) of Article 3.09 provides for taking into consideration the direct sailings between the neighbouring ports and Chennai only for the purpose of calculating total traffic. This is why it lays down that containers not transshipped in the neighbouring ports should form 20% of the total traffic in the 3rd year, 25% in the 4th year and 30% from the 5th year.

(iii) As per Mitra's Legal and Commercial Dictionary, 6th Edition, Page 853, transshipment connotes transfer of containers from one ship or conveyance to another for further transportation.

(iv) Since transshipment connotes a transfer for further transportation, it need not necessarily take place from one vessel to another directly at an intermediate port. It may be unloaded at an intermediate port kept in its warehouse and then reloaded in another vessel to be carried to and unloaded at the destination port.

(v) The words "transshipment" and "non-transshipment" are associated with intermediate ports. In the case of direct transport, there are only 2 places viz., port of origin and port of destination, but there is no transshipment. Therefore, when there is no transshipment, there is no question of non-transshipment. When there is no room, scope, possibility or opportunity, whatsoever for transshipment from one container vessel to another, at an intermediate port, due to direct shipment, the expression "non-transshipment" becomes a misnomer.

(vi) The expression "non-transshipment traffic" distinctly confines the quantum of minimum throughput to be achieved by the first respondent, to containers which pass through the 5 neighbouring intermediate ports without transshipment in any of them.

(vii) The crux of Article 3.09 is on attracting and bringing more and more Main Line Vessels to ply between Chennai and Ports West of Salalah and between Chennai and Ports East of Port Klang without transshipment in any of the 5 neighbouring ports.

(viii) The object is to promote Chennai as a hub port on the East Coast of India similar to the one at Bombay in the West Coast, resulting in direct sailings from Chennai to the rest of the world beyond Port Klang on the East and beyond the Port of Salalah on the West and vice versa.

(ix) By a fax dated 14.12.2000, filed as Ex. R-35, the first respondent requested an amendment to the draft license agreement so as to make it clear that the origin and destination cargo between any of the 5 neighbouring ports and Chennai shall be counted towards minimum throughput. But under Ex. R-36 reply dated 24.1.2001, the request was rejected.

(x) The proviso that the first respondent wanted to incorporate in Article 3.09(b), vide their letter Ex. R-35 and the rejection of the same by the petitioner clinches the issue.

(xi) By virtue of the decision of the Constitution Bench of the Supreme Court in Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd. (AIR 1962 SC 1810) followed in Pure Helium India P. Ltd. v. ONGC (2003 (8) SCC 593), the conduct of the parties and surrounding circumstances may be relevant factors in construing a contract.

(xii) By virtue of the 6th Proviso to Section 92 of the Evidence Act, any fact may be proved, which shows in what manner the usage of a document is related to existing facts.

(xiii) Principles that form the basis for the 6th Proviso to Section 92 of the Evidence Act, also found approval in the opinion of the Privy Council in Bal Kishen Das v. W.E. Legge {1906 (27) IA 58 (PC)}. They were reiterated in a subsequent opinion of the Judicial Committee of the Privy Council in Baijnath Singh v. Hajivali Mohamed (AIR 1925 PC 75).

64. From the reasonings adopted by the majority and the reasonings adopted by the minority, it is clear that the dispute between the parties revolved only around one simple question namely "whether the volume of traffic that was turned out between Chennai as the Port of Origin and those five neighbouring ports, as the Ports of Destination and vice versa, is liable to be included in the total traffic, for the purpose of ascertaining whether the licensee achieved the minimum throughput of non transshipment traffic or not?"

65. In order to find an answer to such a simple question, the parties engaged the Arbitral Tribunal in a combat of legal gymnastics, with the petitioner relying more upon the intention behind the contract and the first respondent convincing the majority not to go beyond the express words of the contract. The cob web of legal principles, created by judicial precedents, convinced the majority to think that once a contract is reduced into writing, both parties have to go simply by the ordinary meaning assigned to the words contained in the contract. But, the minority did not feel bound by such rigid rules of interpretation. Therefore, the primary question that I am called upon to decide in this petition under Section 34, is to find whether the view taken by the majority is in accordance with the law of the land and public policy or not.

66. If what the majority did, namely to interpret Article 3.09 of the contract, by just looking into its plain language and looking into the meaning assigned by a host of ordinary English dictionaries and the Wikipedia to the words and expressions found therein, is in accordance with law, then the award cannot be interfered with. But, if the Arbitrators were obliged, by law, to look into (i) the surrounding circumstances (ii) the nature and purpose of the contract and (iii) the intention of the parties in entering into the contract, then the refusal of the majority to look into these aspects, may not be in accordance with law, making their opinion vulnerable to be set at naught.

67. I am conscious of the fact that great men of eminence, erudition and scholarship constituted the majority in this case. But, they were convinced to come to the conclusion that they did, in view of the traditional and conservative approach to the question of interpretation of contracts. As the majority has rightly observed, the law as it originally stood for several decades was that a Court or Arbitral Tribunal shall not travel beyond the words in which a contract has taken shape. But, in the past two decades or so, the law has taken a deviation. As pointed out by the Supreme Court, in Pure Helium [2003 (8) SCC 593], D.D. Sharma [2004 (5) SCC 325], Mcdermott International [2006 (11) SCC 18], Bank of India [2009 (5) SCC 313] and G. Ramachandra Reddy [2009 (6) SCC 414], a Court or Arbitral Tribunal is now obliged to look into (i) the circumstances surrounding the execution of the contract; (ii) the object of the contract; and (iii) the intention of the parties. As succinctly summarised by the Supreme Court in Bank of India, the nature and purpose of the contract is an important guide in ascertaining the intention of the parties.

68. The nature and purpose of the whole contract in this case, as seen from the policy formulated by the Government of India way back in 1997, the queries raised and the reply given by the Ministry and the entire correspondence that eventually culminated in the execution of the contract, show that the very purpose and intention of Chennai Port Trust, in inviting the first respondent for participation, was to ensure that Chennai Port became a Hub Port within a period of time. For testing whether a port is a Hub Port or not, the petitioner has adopted certain parameters, such as the achievement of a particular size of non transshipment traffic during the third, fourth and fifth year of the commencement of contract. Even during the period of negotiations, prior to the execution of the contract, the petitioner had understood non transshipment traffic to exclude the traffic between Chennai Port and the Ports of five neighbouring countries indicated in Article 3.09. But unfortunately, the manner in which the contract was drafted, appears to have given rise to the possibility of a different interpretation, conferring an unintended benefit upon one of the parties namely the first respondent. It is a fundamental principle of the law of contracts that no party can be allowed to enrich itself unjustly at the cost of another. Therefore, it is not open either to me or to the Arbitral Tribunal to tell the petitioner, which is a public body "this is the contract you have entered into; therefore you have to suffer it".

69. To put it in simple terms, the Arbitral Tribunal had two choices before it namely (i) either to read the contract as an English Professor would do and to turn away from the consequences of such linguistic liturgy or (ii) to understand the contract with reference to its object and intent and put the parties to their actual bargain, without enabling either of them to gain any undue advantage, out of the folly of the draftsman. I think the law as it has developed today, is in favour of the second alternative. Therefore, the award is liable to be set aside.

70. But before doing so, I should take note of one important argument advanced by Mr. Navroz Seervai. Drawing my attention to Ex-C.26 - the brochure issued by the petitioner, wherein they themselves claimed to have become a Hub Port, it was contended by the learned Senior Counsel for the first respondent that the object of the contract had been well served and that the same has also been recognized by the very claim made by the petitioner in their brochure and website.

71. But, what is indicated in Ex. C.26 is that the Port of Chennai was "Emerging Hub Port of the Indian Sub Continent". There is a world of difference between a Port which has actually become a Hub Port and one that is merely emerging as a Hub Port. Moreover, the question as to whether the first respondent had fulfilled the terms of the contract or not, has to be seen only from the volume of traffic with reference to Article 3.09 and not with reference to anything else. Therefore, Ex. C.26 will not tilt the balance in favour of the first respondent.

72. Therefore, in my view, the award is liable to be set aside. The award comprises of two parts viz., (i) that of allowing the claim of the first respondent herein and (ii) rejecting the counter claim of the petitioner herein. In so far as the counter claim of the petitioner is concerned, it is rejected both by the majority as well as by the minority. While the majority rejected the counter claim of the petitioner on the ground that there has been no deficit in non-transshipment traffic, due to the interpretation given by them to Article 3.09, the minority also rejected the counter claim on the ground that no statistics are furnished and no data was given by the petitioner for arriving at the counter claim. This is how both the majority as well as the minority concurred that the counter claim is to be rejected. Unfortunately, the petitioner has not highlighted even in the above petition under Section 34 as to how the valuation of the counter claim was made by them. Therefore, I am unable to grant the relief of decreeing the counter claim in favour of the petitioner, despite the fact that it is a logical corollary to my conclusion on the other issues. Hence, the award in so far as the rejection of the counter claim of the petitioner is concerned, is to be upheld. In view of the above, the original petition is allowed, the award in so far as it grants reliefs in favour of the first respondent is concerned, is set aside. Paragraph 13.7 of the operative portion of the award, rejecting the counter claim of the petitioner alone is upheld. The parties are directed to bear their respective costs.