ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED versus THE BOARD OF TRUSTEES OF JAWAHARLAL NEHRU PORT AUTHORITY & ORS

Summary

Jawaharlal Nehru Port Authority treated Adani Ports and SEZ as ineligible for two tenders under Clause 2.2.8 of its Request for Qualification. The ground was that the Visakhapatnam Port Authority had terminated a 2011 concession agreement with Adani in December 2020, a termination disputed in pending arbitration. The Bombay High Court dismissed Adani's writ petition, and Adani also challenged Clause 2.2.8 under Article 32. By broad consensus, the Supreme Court disposed of the matters. Adani gave up any claim to the two tenders. The Court recorded that, in the peculiar facts, the Visakhapatnam termination would not be treated as a disqualification for any future tender by public authorities. The Article 32 petition was withdrawn with liberty to challenge Clause 2.2.8 or similar clauses before the High Court, to be decided on merits uninfluenced by the High Court's judgment.

Issues

1. Whether termination of a concession agreement by another port authority, disputed in pending arbitration, could disqualify the bidder from tenders under Clause 2.2.8 of the RFQ
2. How the appeal and the Article 32 challenge to Clause 2.2.8 should be disposed of in view of the parties' consensus

Held

• Adani was held ineligible under Clause 2.2.8 because of the Visakhapatnam Port Authority's termination of the 2011 concession agreement, a termination that was disputed and pending before an arbitral tribunal. The question of termination therefore remained at large. (¶¶ 2, 4, 8)
• On the broad consensus of the parties, and Adani having undertaken to make no claim in respect of the two tenders, the Court directed that, in the peculiar facts and circumstances, that termination would not be treated as a disqualification or ineligibility for participation in any future tender issued by public authorities. (¶¶ 4.1, 5, 6, 8)
• The validity of Clause 2.2.8 was not before the High Court and was not examined by the Supreme Court. The Article 32 petition was dismissed as withdrawn with liberty to challenge that clause or identical clauses before the High Court, to be decided on merits uninfluenced by the impugned judgment. (¶¶ 4.2, 9)

Result

Civil appeal and writ petition disposed of. Adani had no claim to the two tenders; the Visakhapatnam termination is not to disqualify it in future public tenders; and liberty was granted to challenge Clause 2.2.8 before the High Court.