(Prayer: Civil Miscellaneous Appeal is filed under section 37(2)(b) of Arbitration and Conciliation Act, 1996 to set aside the Interim Order dated 19.11.2015, clarified by Corrigendum dated 19.01.2016, passed by the learned Arbitrator, in I.A.No.1 of 2015 in A.C.P.No.2 of 2015.)
1. This Civil Miscellaneous Appeal has been filed by the Port Trust challenging the interim order of the Arbitrator dated 19.11.2015 in and by which the Arbitrator had directed the Appellant/ Port Trust to allot Berth Nos.2, 4 and 6 in Jawahar Dock with first preference to the respondent herein.
2. The respondent had entered into a contract with Port Trust for operating Mobile Harbour Cranes inside the port. Since the respondent was the highest bidder in the tender invited by the Port Trust for the said purpose the respondent was awarded the contract and even in the Pre-bid meeting the respondent had raised certain queries regarding the depth of the drafts so that the mobile harbour cranes which are of very high capacity could be installed in the berths where larger ships with larger capacity are berthed. In response to the said query at the Pre-bid meeting the Port Trust had said that the dredging of the drafts to a depth of 14 meters will be completed before Mobile Horbour Crane operation commenced.
3. Complaining that the same was not done, the respondent sought for allotment of different berths which according to the respondent were deeper than the berths that were allotted under the contract. So far as the present dispute is concerned, we are concerned only with the Jawahar Dock, wherein berth Nos.1, 3 and 5 were allotted to the respondent, since all the three berths were very shallow and large ships could not be berthed the respondent sought for an amendment of the agreement as per clause 17 of the Concession Agreement which provides for an amendment. Since there was no reply, the respondent was forced to raise dispute and seek reference for arbitration.
4. Accordingly, the Port Trust appointed an Arbitrator who entered upon the reference and during the pendency of the proceedings the respondent filed an application for interim direction seeking direction to the Port Trust to allot berth Nos.2, 4 and 6 in Jawahar Dock instead of 1, 3 and 5, since, according to the respondent, those berths were deeper and they could accommodate larger ships.
5. It is also pointed out that in view of the nature of the contract such allotment which allows larger quantity of goods to be handled by the cranes belonging to the respondent would be beneficial to the Port Trust. According to the respondent, as per the contract, the respondent will have to pay 27.27% of the gross revenue to the Port Trust. Therefore, if the respondent's gross revenue increases, it would be advantageous to the Port Trust only.
6. Though, the Port Trust did not file a counter, it contested the said application. The Arbitrator passed an interim order directing the Appellant/Port Trust to allot berth Nos.2, 4 and 6 in Jawahar Dock to the respondent on priority along with a rider to the effect that the respondent shall not be entitled to claim any loss of business because of the depth of the dock, once it is allotted berth Nos.2, 4 and 6 in the Jawahar Dock. This order is challenged by the Port Trust.
7. Mr.G.Rajagopal, learned Additional Solicitor General would contend that the interim relief granted by the Arbitrator would tantamount to allowing the very claim petition since the prayer No.3 in claim petition is identical to the interim prayer. Therefore, the learned Additional Solicitor General would contend that the Arbitrator was not right in granting such a sweeping interim order.
8. Mr.K.V.Subramanian, learned Senior counsel appearing for the respondent would submit that the Arbitrator has considered the entire question and has found that if interim order is not granted it would lead to the main proceeding becoming infructuous by passage of time and with holding of interim relief at this stage would result in dismissal of the main petition itself, in as much as the loss suffered by the respondent is about Rs.2.5 Crores per day. The learned Senior counsel would submit that the Arbitrator was justified in passing the interim order.
9. I have considered the rival submissions. The contract is admittedly one that operates on the basis of the revenue earned by the respondent by operation of the cranes. Even during the pre-bid meeting the respondent have placed specific query which reads as follows :
' Any plan for deepening the draft to 14 meters If so when the dredging is expected to be completed.
' For this question the specific answer given by the Port Trust is as follows :
' Yes, it will be completed before MHC operation begins.'
10. It is not in dispute that this Corrigendum forms part of the original agreement. Therefore, it is seen that there is an undertaking by the Port Trust to deepen the drafts to 14 meters before the operations had begun.
11. The Arbitrator has also taken note of this fact and has held that there is an obligation on the part of the Port Trust to deepen the draft, so as to accommodate larger ships. Since that did not happen the respondent were compelled to seek amendment of the contract, which allots berth Nos.1, 3 and 5 in Jawahar Dock to the respondent, with a request for allotment of berth Nos.2, 4 and 6 which were admittedly much deeper than berth Nos.1, 3 and 5. There was no response on the part of the Port Trust to the said request for amendment.
12. Left without any other remedy the respondent had raised dispute and the same was referred to arbitration. Upon reference the Arbitrator has passed the above interim order which would fall within Section 17(1)(e) of the Arbitration Act.
13. Mr.G.Rajagopal, learned Additional Solicitor General does not dispute the fact that the Arbitrator has the powers of Court under Section 17. Therefore, the Arbitrator is entitled to pass interim order which would have the effect of minimizing the loss for both the parties.
14. Admittedly, in the case on hand, if the respondent's business volume increases the share in the revenue of Port Trust will also increase. Therefore, the Port Trust is not put to any loss because of the interim order. On the other hand, the Port Trust is benefited by the interim order.
15. The interim order was passed as early as on 19.11.2015 and on 30.11.2015 the Port Trust had complied with the interim order of the Arbitrator and had allowed the respondent to shift the Mobile Cranes from Jawahar Dock No.1 to Jawahar Dock East area No.4. This would show that the appellant had in fact complied with the order of the Arbitrator.
16. Lastly Mr.G.Rajagopal, learned Additional Solicitor General would invite my attention to the judgment of the Hon'ble Supreme Court in Deoraj Vs. State of Maharashtra and others reported in (2004) 4 SCC 697, wherein the Hon'ble Supreme Court had held that the grant of interim relief which would be same as the main relief or tanmtamounting to a mandatory injunction could be made subject to certain conditions. Referring to para No.12 of the said judgment the learned Additional Solicitor General would contend that even if the respondent suffers certain loss due to the non allotment of berth Nos.2, 4 and 6 the respondent it can be compensated in terms of money.
17. But the Hon'ble Supreme Court in the very same judgment has stated that such an interim mandatory injunction can be granted if the Court feels that nothing would be left to be allowed as relief to the petitioner by the time the main proceedings could be disposed of, the Court can always grant interim mandatory relief.
18. In the case on hand, as rightly pointed out by the learned Senior counsel for the respondent, the loss suffered by the respondent due to the reduced usage of the Mobile
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Harbour Crane is to the tune of Rs.2.5 Crores per day, this factual aspect is not disputed. By the time the main Arbitration OP is decided this Rs.2.5 Crores per day would become so much that the respondent will not be in a position to continue its operation beyond the particular point of time. As pointed out by the Hon'ble Supreme Court with holding of interim relief would tantamount to rejection of main relief itself. The fact that the interim orders has been in force for nearly 2 years and its virtual implementation also has to be taken into account. 19. Therefore, I do not see any reason to interfere with the order passed by the learned Arbitrator. The Civil Miscellaneous Appeal fails and it is accordingly dismissed. This however, will not prejudice the contentions of the parties before the Arbitrator. Consequently, the connected Miscellaneous Petition is closed.