The Supreme Court of India has set aside the arbitral award, the order of the appellate authority, and the Orissa High Court’s ruling in the long-standing tariff dispute between Paradip Port Authority (PPA) and Paradeep Phosphates Ltd. (PPL). The matter has now been remitted to the Tariff Authority for Major Ports (TAMP) for fresh adjudication.
Background of the Case
The dispute dates back to 1985, when PPA (then Paradip Port Trust) entered into an agreement with PPL, then a public sector unit, for exclusive use of a “fertilizer berth.” The agreement fixed certain rates, with any future revision to be made by mutual consent.
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In 1993, PPA issued a notification revising the tariff under powers granted by the Major Port Trusts Act, 1963, which PPL contested. Arbitration proceedings followed, resulting in a 2002 award directing PPA to refund additional charges collected between October 1993 and March 1999.
Subsequent appeals before the appellate authority and the Orissa High Court upheld the arbitrator’s decision. PPA then moved the Supreme Court.
"Merely because an agreement was entered into between the parties, the same cannot override the provisions of law," the Court observed.
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The bench, led by Justice Rajesh Bindal, noted several key issues:
- The appellate authority’s order was “totally cryptic” and failed to examine the legal and factual aspects of tariff revision.
- The High Court erred in holding that the agreement overrode statutory provisions.
- The matter involved complex technical and economic considerations that should be examined by an expert body like TAMP.
- Since no adjudicatory board has been constituted under the Major Port Authorities Act, 2021, TAMP retains jurisdiction.
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Orders Passed
- For 1993–1999: The Court set aside the arbitral award, the appellate authority’s order, and the High Court ruling, remitting the matter to TAMP for a fresh decision.
- For 1999–2010: The Court also set aside TAMP’s 2011 order (which had rejected tariff revision) and the High Court’s affirmation, directing TAMP to re-examine the case alongside the earlier period.
- Both parties are to be given a full opportunity of hearing before TAMP.
"The issues required to be considered for revision of rates have not been addressed in the manner required. TAMP, being an independent authority consisting of experts, is the right forum," the judgment stated.
Beyond the dispute, the Supreme Court recommended that an expert appellate body be set up to hear appeals from TAMP or the adjudicatory board, similar to appellate tribunals in sectors like electricity, telecom, and competition law.
Case Title:
- Paradip Port Authority vs. Paradeep Phosphates Ltd.
- Board of Trustees of Paradip Port vs. Paradeep Phosphates Ltd. & Anr.
Case Numbers:
- Civil Appeal No. 10542 of 2025 (arising out of SLP (C) No. 9751 of 2023)
- Civil Appeal No. 10543 of 2025 (arising out of SLP (C) No. 9870 of 2023)
Date of Judgment: 2025 INSC 971
