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A Supreme Court bench of Justices J.K.Maheshwari and Hima Kohli today issued notice in a special leave petition filed by the Cargo Terminal Operator PSA SICAL Terminals Limited and directed that a status quo will be maintained between the parties.

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 at Tuticorin. The Madras High Court passed a judgment on June 7, 2022 rejecting the challenge by PSA SICAL for consideration of the tariff charge and royalty issue before a committee that was specifically formed to adjudicate it.

Dr. Abhishek Manu Singhvi, Sr.Adv, appearing for SICAL argued that 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. The Port Authority was of the view that the new committee could no longer adjudicate upon the disputes. This led to a confirmation of a liability of over INR 1,027 crore against PSA SICAL.

It was argued that the Port Authority had also issued a Termination Order on the same date as the judgment of Madras High Court to terminate the License Agreement with PSA SICAL and indicated that it would initiate appropriate process for dispossession and recovery of dues. ASG Madhavi Divan appeared for the port authorities and objected to an interim order being passed in the matter.

The Supreme Court, on hearing the submission, passed an order granting a status quo. This order of the Supreme Court would mean that the Port Authority would now be restrained from initiating any action toward PSA SICAL.

The disputes had originated between the parties under a license agreement which was awarded to PSA SICAL in 1998 to design, engineer, finance, erect and operate berth no. 7 of the Port called “Container Terminal” for a period of 30 years. Under the License Agreement, PSA SICAL had to pay fixed royalty every month to the Port Authority. However, it has been alleged that 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 had allowed PSA SICAL to charge, thus making it commercially unviable to operate.

PSA SICAL was represented by Dr. Abhishek Manu Singhvi and Kavin Gulati, Senior Advocates assisted by the team from Karanjawala & Co. led by  Ruby Singh Ahuja, Senior Partner and Kritika Sachdeva and Varun Khanna, Senior Associates.

Case title: PSA SICAL Terminals Limited v. Union of India & Anr