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The Ernakulam Principal District and Sessions Court has dismissed an arbitration petition filed by Kochi port against the dredging company Jaisu Shipping seeking an order directing the company to furnish a security of Rs 300crore, which is approximately assessed as damages, to be realised from the company and for conditional attachment of its dredgers and equipment.
Dismissing the petition, the District Judge, Mr B. Kemal Pasha, observed that the petitioner (Kochi Port) can only have a claim for the actual loss and damages, which are yet to be assessed, as per Section 73 of the Indian Contract Act. The court did not find that the petitioner has established a prima facie case for seeking an attachment for an amount of Rs 300 crore in the matter.
The court held that there are no sufficient materials to show as to how the petitioner has assessed an amount of Rs 300crore as the total loss and damages which they are entitled to realise from the dredging company.
The court also said that there is no meaning in appointing an Advocate Commissioner as sought by the petitioner to conduct hydro-graphic survey to ascertain the present dredging depth in the channel, as the dredging work has been awarded to another company, which is fast progressing. The petitioner ought to have applied for the appointment of such a commissioner at the time of the termination of the contract or immediately on such termination and prior to the interference of any fresh contractor, the court said.
The Kochi Port had entered into an agreement with Jaisu Shipping in December 2008 to carry out capital dredging to provide 14.5 metres depth at the ICTT at Vallarpadam. Though specific time frame was fixed for completing the works, the company could not complete the work on time despite several extensions. The port submitted that the dredging company had failed to carry out the remaining work and the management was forced to carry out the remaining work at the company’s risk and cost. The port will have to spend approximately Rs 300 crore for the completion of dredging work left over by the dredging contractor.
According to the petitioner, since the dredging contractor has failed to complete the work in consonance with the terms of the contract, the only option left is to carry out the remaining work at the risk and cost of the dredging contractor.
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