The Madras High Court has asked the law reporters to ensure that the errors in numbering of the paragraphs of the judgments are not cause in future so as to avoid any confusion. 

The Court was hearing an appeal under Section 37(1) (c) of the Arbitration and Conciliation Act, 1996, assailing the order passed by the District Court confirming the Award by the Arbitration Tribunal with regard to the rejection of counter claim.

The Division Bench comprising Justice GR Swaminathan and Justice MD Sumathi observed, "In view of the continuous numbering of the paragraphs of the judgments of both the majority judges as well as that of His Lordship K.V.V.J, many of us went by the final paragraph as the answer to the reference. We did wonder that it was not in tune with what the majority expressed. We would request the law reporters to ensure that such confusions are not caused in the future. Be that as it may, even the majority judgment does not permit granting something that was refused by the Arbitral Tribunal. Only a limited modification was permitted. The Principal District Judge in this case has modified the entire claim by re-appreciating the evidence and awarding liquidated damages. Such a course of action is clearly impermissible. It runs counter to the dictum laid down in Gayatri Balasamy."

Additional Advocate General B. Saravanan appeared for the Appellants, while Senior Advocate C. Mani Shankar appeared for the Respondents.

The dispute arose between the parties and related to the alleged illegal termination of the license agreement. Consequently, an Arbitral Tribunal was formed to decide the issues between the parties. 

M/s.Flemingo Duty Free Shop Private Limited filed its statement of claim seeking compensation under various heads for the Port Trust's delay in providing statutory clearances. The claimant also sought the amount paid under protest by the Claimant as liquidated damages along with interest as well as a sum of NR 6,84,00,000 towards wrongful encashment of Bank Guarantee along with interest among other reliefs. The Port Trust filed counter and also lodged counter-claim seeking damages for the expenses incurred by it.

After hearing both the sides, the Arbitral Tribunal passed the award upholding only one claim of the claimant and negatived the rest. The Arbitral Tribunal also rejected the counterclaim made by the Port Trust.

Aggrieved by the non-grant of other reliefs, the claimant filed Arbitration Petition before the District Court. The Award was upheld by the Court, hence, the present appeal was filed. 

The High Court dealt with the moot question i.e. whether the Court exercising jurisdiction under Section 34 or 37 of the Act, can modify the award passed by the Arbitral Tribunal. For which the Court relied in the landmark judgment passed by the Supreme Court in Gayatri Balasamy vs. ISG Novasoft Technologies Limited (2025). 

The Court referred to the majority's view and the dissenting opinion by Justice KV Viswanathan. 

It highlighted that in some law reports the final paragraph was wrongly mentioned. 

The Court held that District Court in this case modified the entire claim by re-appreciating the evidence and awarding liquidated damages. Such a course of action is clearly impermissible. It ran counter to the dictum laid down in Gayatri Balasamy.

"We, therefore, hold that by granting the relief of liquidated damages to the claimant, the learned Principal District Judge has virtually rewritten the award. Therefore, the impugned order dated 12.09.2019 is set aside", the Court held. 

Accordingly, the Court allowed the appeal and set aisde the impugned order.

Cause Title: V.O.Chidambaranar Port Trust v. M/s.Flemingo Duty Free Shop (P) Ltd. [C.M.A.(MD)Nos.462 and 463 of 2021 and C.M.P.(MD)No.4036 of 2026]

Appearances:

Appellants: Additional Advocate General B. Saravanan and Advocate A.Arivuchandran

Respondents: Senior Advocate C. Mani Shankar 

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