The Mumbai High Court has directed Jawaharlal Nehru Port Authority and Gateway Terminals India Pvt Ltd to execute a long-pending settlement agreement within six weeks—by May 21—bringing a potential end to a 14-year tariff dispute, and notably ruling that consent or a no-objection certificate (NOC) from the Union government is not required.
In a strongly worded order dated April 10, the division bench criticized officials of the Ministry of Ports, Shipping and Waterways for “refusing to take a stand” and allowing the matter to circulate “round and round without any finality.”
Background of the dispute
GTI, a container terminal operator at JNPA, is majority-owned (74%) by APM Terminals Management BV, part of Danish shipping giant A P Moller Maersk, with the remaining 26% held by Container Corporation of India Ltd. The terminal began operations in 2006 under a 30-year concession.
The dispute traces back to February 2012, when the then tariff regulator slashed GTI’s rates by 44.28%. GTI secured an interim stay from the High Court, allowing it to continue charging pre-revision tariffs pending final adjudication—a case that has remained unresolved since.
Conciliation efforts and the court’s stance
In 2021, both parties referred the dispute to a government-backed conciliation mechanism. A settlement agreement was subsequently worked out through the Conciliation and Settlement Committee, incorporating inputs from the Adjudicatory Board for Major Ports—the successor to the erstwhile Tariff Authority for Major Ports.
Despite the Board’s consent to the settlement, it was made subject to approval from the Union government. The Ministry later suggested referring the matter back to the Adjudicatory Board, citing complexities and financial implications.
Rejecting this approach, the Court observed that all critical issues—tariff determination, surplus/deficit calculations, and treatment mechanisms—had already been thoroughly examined and resolved within the settlement framework, with expert input.
“The complex matters… were all taken into consideration… and thereafter the settlement agreement was prepared,” the Court noted, adding that revisiting the process would only prolong the dispute unnecessarily.
Key directions
The Court ruled that:
- JNPA and GTI must execute the settlement agreement within six weeks
- Union government approval or NOC is not required
- The agreement, once executed, will carry the legal status of an arbitral award under the Arbitration Act
It also emphasized that surplus funds identified under the agreement would be allocated to an infrastructure fund for port users.
Court criticizes bureaucratic inaction
In a notable observation, the bench remarked that government अधिकारियों often avoid taking decisions due to fear of future scrutiny or harassment, even when a reasonable resolution is evident.
“We think that the officers ought to act as per their conscience…,” the Court said, calling the case an example of administrative reluctance delaying resolution.
Precedent and implications
The Court also referenced a similar case involving Nhava Sheva International Container Terminal (NSICT), which was resolved in April 2025 through the same conciliation framework—highlighting consistency in judicial support for alternative dispute resolution in port sector PPP contracts.
The ruling is expected to provide clarity and confidence for private operators and public authorities engaged in long-term infrastructure concessions, particularly in resolving legacy tariff disputes.
Source: ET Infra.com