SC seeks Centre response on PSA SICAL plea

The Supreme Court on Friday sought the Ministry of Shipping and the Chidambaranar Port Trust's response to the petition filed by the Cargo Terminal Operator PSA-Sical Terminals Limited challenging order of Madras HC in connection with the settlement of a dispute over royalty payments.

The court further directed that a status quo be maintained between the parties.

The apex court was hearing a petition filed by PSA-Sical Terminals Limited challenging a Madras High Court judgement dated June 7.

The Petitioner PSA-Sical is a company, which operates a Container Tenninal at the Tuticorin Port, the Country's second privatized port, for over and above a period of 20 years and preferred the captioned Special Leave Petition challenging the Madras HC Judgement dated June 7 2022. Vide the June 7 Judgement, the Division Bench of Madras HC has upheld the order dated 19.01.2022 passed by Single- Judge bench of its court.

Madras High Court has rejected PSA-Sical Terminals Limited's plea seeking to issue direction to the Union Government to ensure that the members of the Committee expeditiously proceed with the process/ proceedings initiated by the respondent vide Office Memorandum dated 21.07.2020 for settlement of disputes between the appellant and The Board of Trustees of V.O.Chidambaranar Port Trust.

PSA SICAL has been embroiled in a contentious litigation, since the year 2014, over the tariff charges and the royalty being paid by the Cargo Terminal Operator with Chidambaranar Port Trust.

The High Court of Madras, by its judgment dated June 7 2022 had rejected the challenge before it by PSA-Sical for consideration of the issue before a Committee that was specifically formed for this issue. The Government of India had later unilaterally disbanded this Committee, before PSA-Sical was given an opportunity of a hearing before it and replaced it with another Committee, however, the Port Authority was of the view that the new Committee could no longer adjudicate upon the disputes. This led to a confirmation of liability of over INR 1,027 crore against PSA SICAL, according to the petitioner.

The Port Authority had also issued a Termination Order on the same date, i.e., June 7 2022, to terminate the License Agreement with PSA-Sical and indicated that it would initiate an appropriate process for dispossession and recovery of dues.

The disputes had originated between the parties under a License Agreement which was awarded to PSA-Sical in 1998 to inter alia design, engineer, finance, erect and operate berth no. 7 of the Port called "Container Terminal" for a period of 30 years. Under the said License Agreement, PSA-Sical had to pay fixed royalty every month to the Port Authority. However, as time passed, the Port Authority kept escalating the Royalty Charges every year, eventually the same being much higher than the average container handling charges that it allowed PSA-Sical to charge, thus making it commercially unviable to operate.

PSA-Sical was represented by Senior Advocates Abhishek Manu Singhvi, and Kavin Gulati, who were assisted by the team from Karanjawala & Co. led by Ruby Singh Ahuja, Senior Partner and Kritika Sachdeva and Varun Khanna, Senior Associates and the team from ZD Legal led by Zerick Dastur and Archana Uppuluri, Advocates.

The Port Authority was represented by Madhavi Divan, Additional Solicitor General of India.

( With inputs from ANI )