The Supreme Court has cleared the path for Adani Ports and Special Economic Zone Ltd (APSEZ) to qualify for upcoming tenders issued by State-owned major ports with the apex court ruling that the firm’s disqualification arising from termination of a contract at Visakhapatnam Port “shall not bar or act as disqualification for the petitioner (APSEZ) for future tenders floated by public bodies”.
India’s biggest private port operator was excluded from tenders issued by some of the major ports in recent months citing a tender condition that forbids firms involved in contract termination at other ports from participating.
A coal handling terminal run by a unit of APSEZ at Visakhapatnam Port Authority was terminated in December 2020, a few years into its 30-year concession.
“An Applicant including any Consortium Member or Associate should, in the last three years, have neither failed to perform on any contract, as evidenced by imposition of a penalty by an arbitral or judicial authority or a judicial pronouncement or arbitration award against the Applicant, Consortium Member or Associate, as the case may be, nor been expelled from any project or contract by any public entity nor have had any contract terminated by any public entity for breach by such Applicant, Consortium Member or Associate,” according to clause 2.2.8 of the tender conditions.
Invoking this clause, Jawaharlal Nehru Port Authority disqualified Adani Ports and Special Economic Zone in June/July from tenders it had floated to privatise two cargo handling terminals.
APSEZ challenged its disqualification from one of the tenders – to privatise the container handling facility self-run by the port authority – in the Bombay High Court but lost the case. The firm then approached the Supreme Court for relief.
On Monday, the apex court ruled that the disqualification arising from the termination of contract at Visakhapatnam Port shall not bar or act as disqualification for the petitioner for future tenders floated by public bodies.
Since clause 2.2.8 in the tender document impugned in the writ petition brought by APSEZ was not challenged before the high court, the petitioner shall be at liberty to challenge the same afresh before the high court, the Supreme Court said.
Further, the apex court said that the petitioner is at liberty to challenge any such clause of similar nature before the high court, un-influenced by the observations of the impugned order (of the Bombay High Court).
“The Supreme Court has upheld the decision of Jawaharlal Nehru Port Authority to disqualify APSEZ from the two tenders by invoking Clause 2.2.8 of the tender document citing the termination of the company’s contract at Visakhapatnam Port,” a Jawaharlal Nehru Port Authority official said. “JNPA stands vindicated,” he added.
The apex court order will help APSEZ qualify for future tenders, including those which are in progress where the firm has submitted qualification documents. This is because the APSEZ’s contract termination at Visakhapatnam Port cannot be used as a ground or reason by the major port authorities to disqualify the firm using Clause 2.2.8 of the tender conditions, per the court order.
