In a significant ruling on the limits of court intervention in arbitration, the Supreme Court of India has restored an arbitral award in favour of Jan De Nul Dredging India Pvt. Ltd., holding that appellate courts cannot re-interpret contracts once an arbitral view has already been upheld under law. The judgment was delivered on January 7, 2026, ending a long-running dispute with Tuticorin Port Trust.
Background of the Case
The dispute traces back to a major port infrastructure project for deepening the channel and basin at Tuticorin Port to handle larger vessels. In 2010, the Port Trust awarded the contract-worth over ₹465 crore-to Jan De Nul Dredging India, a company specialising in complex dredging operations.
The work was completed well ahead of schedule. Despite this, disputes arose when the final bill was not fully settled. The contractor invoked arbitration, raising multiple claims. One key claim concerned compensation for “idle time” of a Backhoe Dredger, allegedly caused by delays in providing access to the work site.
In 2014, a three-member arbitral tribunal allowed this claim and awarded ₹14.66 crore to the contractor.
The Port Trust challenged the award before the Madras High Court under Section 34 of the Arbitration and Conciliation Act, 1996. A single judge refused to interfere, noting that the tribunal’s interpretation of the contract was reasonable and based on the material on record.
However, the Port Trust carried the matter further in appeal under Section 37. In 2021, a Division Bench of the High Court overturned the award relating to idle charges, reasoning that such compensation was payable only for “major dredgers” and not for a Backhoe Dredger.
This reversal led Jan De Nul Dredging India to approach the Supreme Court.
Court’s Observations
The Supreme Court took a firm view on the scope of judicial review in arbitration matters. The bench underlined that Section 37 does not provide a wider appellate power than Section 34.
“The appellate court cannot undertake a fresh interpretation of the contract merely because another view is possible,” the bench observed, stressing that courts are not meant to sit as regular appellate forums over arbitral awards.
The judges noted that the arbitral tribunal had carefully examined the contract clauses and concluded that compensation for idle equipment was permissible. This interpretation had already been accepted by the single judge of the High Court.
The Court also clarified that the contract did not bar compensation for equipment other than so-called “major dredgers.” Reading the clauses together, the tribunal’s view was found to be a “plausible and reasonable interpretation,” not suffering from any patent illegality.
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Decision
Setting aside the 2021 judgment of the High Court’s Division Bench, the Supreme Court restored the arbitral award in full. It held that the High Court had “manifestly erred in law” by interfering with an award that was well within the boundaries of the Arbitration Act.
With this, the appeal was allowed, and the ₹14.66 crore award in favour of Jan De Nul Dredging India stands revived. No order on costs was passed.
Case Title: Jan De Nul Dredging India Pvt. Ltd. v. Tuticorin Port Trust
Case No.: Civil Appeal arising out of SLP (C) No. 8803 of 2021
Decision Date: January 7, 2026
