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India has won an international arbitration involving French company Louis Dreyfus Armateurs (LDA). The Permanent Court of Arbitration has also awarded India over $7 million (₹50 crore) as compensation towards legal expenses.
The Haldia Dock Complex of the Kolkata Port Trust had awarded a supply, maintenance and operation contract for Berths 2 and 8 to ABG Infralogistics and ABG Kolkata Container Terminal in April 2009. Later, LDA was inducted as a partner in this joint venture, Haldia Bulk Terminals Pvt Ltd (HBT).
Problems started in 2012 when HBT terminated the contract citing mounting losses, non-allocation of cargo to Berths 2 and 8 and other factors like declining law and order issues. Multiple litigations followed.
In the meantime, LDA served an arbitration notice against the India government, taking the matter up before the Permanent Court of Arbitration. It claimed that India failed to protect is investment made in the project and filed for claims amounting to $36.15 million (₹260 crore).
According to a KoPT release, the Shipping Ministry and the port trust took up the matter and the arbitration court dismissed “LDA’s claim in their entireity”. The Tribunal held that LDA’s investment is “not entitled to protections” under the Reciprocal Promotion & Protection Investment 1997 Treaty (signed between India and France) as it does not have “minimum 51 per cent” in the project.
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