Jan De Nul Dredging India Pvt Ltd vs. Tuticorin Port Trust

REPORTABLE
2026 INSC 34

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2026
(Arising out of S.L.P. (C) No. 8803 of 2021)

JAN DE NUL DREDGING INDIA
PVT. LTD. …APPELLANT(S)

VERSUS
TUTICORIN PORT TRUST …RESPONDENT(S)

J U D G M E N T

PANKAJ MITHAL, J.

1. Leave granted.
1
2. The appellant-Jan De Nul Dredging India Private Limited
is a company registered under the Indian Companies Act,
1956 with an expertise in executing complex dredging
operations.
2
3. The respondent-Tuticorin Port Trust is a statutory
Signature Not Verified
authority constituted under the Major Port Trust Act, 1963.
Digitally signed by
SNEHA DAS
Date: 2026.01.07
16:57:11 IST
Reason:

1
Hereinafter referred to as ‘appellant-Dredging India’
2
Hereinafter referred to as ‘respondent-Port Trust’
1


It undertook a major dredging project titled “Deepening of
the Channel and Basin to Cater to 12.80 meter Draught
Vessels at Tuticorin Port”. In context with the above project
to enhance the navigational depth of the port to
accommodate larger sea vessels, the Port Trust on
3
15.07.2009 issued Notice Inviting Tender .

4. The appellant-Dredging India was one of the bidders. After
the evaluation of the bids, the contract was awarded to it. A
formal work order was issued to it on 28.10.2010.
Consequently, a License Agreement incorporating the
tender conditions was formally executed between the
parties on 27.12.2010 which involved the monetary value of
Rs.465,47,56,517/- (Rupees Four Hundred Sixty Five Crore
Forty Seven Lakhs Fifty Six Thousand Five Hundred and
Seventeen only). It was stipulated that the work would be
completed within 14 months from the commencement i.e.
by 28.06.2012.
5. The equipment to be deployed for the execution of the
project under the License Agreement included one Cutter

3
In short ‘NIT’
2


Suction Dredger (CSD) with a cutter power of 3,000 HP or
more, three Self-Propelled Barges with hopper capacity of
16,000 cubic meters each, Floating/Submersible Pipelines
of 800-900 mm diameter and one Backhoe Dredger (BHD)
Jerommeke with a bucket capacity of 3 to 4 cubic meters
along with supporting and survey vessels.

6. Clause ‘C’ of the tender conditions which was part of the
NIT stipulated as under :-
“(C) Plant and Equipment – Dredgers
and ancillary equipments:

The intending Tenderers should own or hire
suitable plant and equipment if it is on
hiring, proof of availability of the plant and
equipment on lease/charter for the entire
duration of the work at short notice
specifically for this project shall also be
attached. It will be incumbent on the
intending Tenderers to describe fully the
equipment and plant which they propose to
utilize for completing the work within the
prescribed period. The choice of technology
and plant and equipment proposed to be
deployed will be left to the choice of the
intending tenderers, subject to satisfying
the Port Trust and the adequacy of the
proposed technology and plant and
equipment.

The Port Trust has assessed and average
daily output of 12000 cubic meters for the
scenario of deployment of Heavy Duty CSD
3


to complete the work within the specified
period of Fourteen Months for which the
following indicative plant & equipment could
be required.

1. Cutter Suction Dredger having cutter
power 3000 HP or more -1 No.
2. Self-propelled barges having hopper
capacity 1600 Cubic Meters - 3 Nos.
3. Sufficient length of Floating/Submersible
Pipe lines with and without ball joints 800
mm to 900 mm diameter.
4. Backhoe Dredger having bucket capacity
3 to 4 Cubic Meters - 1 No.
5. Supporting vessels
6. Survey Vessels etc.,

The tender document is open to firms/
companies/voluntary formed Joint
Ventures/ Consortia meeting all the
Minimum Eligibility Criteria as stipulated
herein above.”

7. In view of the above clause, it was open for the appellant-
Dredging India to deploy such equipment as may be
necessary for the dredging purposes including major/minor
dredgers. It was also free to deploy as many dredgers as may
be felt necessary by it, subject to satisfaction of the
respondent-Port Trust. It included one Backhoe Dredger
(BHD) having bucket capacity of 3 to 4 cubic meter.
8. The appellant-Dredging India commenced operations under
the aforesaid project on 28.12.2010. It deployed sufficient
4


equipment more than what was agreed upon in the License
Agreement, including two major Cutter Suction Dredger
(CSD) as well as a Backhoe Dredger (BHD). The dredging
work of the project was completed much ahead of schedule
on 30.08.2011 i.e. eight months before the stipulated
deadline.

9. Upon the completion of the work, a joint survey was
conducted by the respondent-Port Trust and the National
Institute of Oceanography, Goa. The work was found to
have been completed satisfactorily. Accordingly, the port
was commissioned at a new depth on 19.11.2011. A
Completion Certificate/Taking Over Certificate was issued
to the appellant-Dredging India on 02.04.2012, much
before the deadline of 28.06.2012, for the completion of the
work.
10. The appellant-Dredging India submitted a final bill on
29.05.2012 but it was not settled in full. Consequently,
disputes arose between the parties relating to alleged non-
payment and under-payment of dues as raised under the
final bill.
5


11. In the above scenario, the appellant-Dredging India was left
with no option but to invoke the arbitration clause as
contained in the License Agreement. The dispute was
referred on 20.09.2012 to an Arbitral Tribunal consisting of
three members. The appellant-Dredging India raised as
many as eleven claims, one of which was Claim No.7
regarding idle time due to respondent-Port Trust’s failure to
provide possession of and access to site.
12. The Arbitral Tribunal dealt with all the eleven claims and
with the agreement of the parties decided Claim Nos.5, 6
and 7 together. The Arbitral Tribunal vide its award dated
18.10.2014 inter alia awarded an amount of
Rs.14,66,04,216/-(Rupees Fourteen Crore Sixty Six Lakh
Four Thousand Two Hundred and Sixteen only) to the
appellant-Dredging India in respect of Claim No.7 i.e.
regarding idling charges of Backhoe Dredger (BHD).
13. The aforesaid arbitral award was challenged by the
respondent- Port Trust before the Learned Single Judge of
the Madras High Court under Section 34 of the Arbitration
6


4
and Conciliation Act, 1996 , by means of O.P.
No.152/2015. Though, the respondent-Port Trust assailed
the amounts awarded under Claim Nos. 3, 4, 5, 6, 7, 9 and
10 but at the time of hearing restricted its challenge only to
the amount awarded under Claim No.7 with regard to idling
charges for Backhoe Dredger (BHD).

14. The respondent-Port Trust contended before the Learned
Single Judge of the High Court that under Clause 38 of the
License Agreement, the idle time charges were to be paid
only in respect of idling of the major dredgers and that
Backhoe Dredger (BHD) did not fall in that category. The
Tribunal as such was not justified in accepting any claim in
respect of idling of the Backhoe Dredger (BHD).

15. The Learned Single Judge of the High Court on 10.09.2019
dismissed the petition filed under Section 34 of the Act
upholding the findings of the Arbitral Tribunal and that
Clause 38 of the License Agreement did not confine the
payment of idle time compensation in respect of major
dredgers only inasmuch as under Clause 51 of the License

4
Hereinafter referred to as ‘the Act’
7


Agreement, it was open for the appellant-Dredging India to
deploy dredgers without specifying whether major or minor
dredgers. The Learned Single Judge further noted that the
Tribunal had adequately considered the material on record
and had interpreted the relevant clauses in the proper
perspective and as such, there was no occasion for him to
interfere with the award in exercise of limited jurisdiction
under Section 34 of the Act.
16. Even after the award of the Arbitral Tribunal was upheld by
the Learned Single Judge of the High Court, the respondent-
Port Trust was not satisfied. It went in appeal under Section
37 of the Act before the Division Bench of the High Court by
means of OSA No.101/2020. The appeal was restricted to
the claim made and awarded under Claim No.7.
17. It was argued that idle time compensation applicable in
respect of major dredgers, could not have been awarded in
respect of a minor dredger i.e. Backhoe Dredger (BHD). It
was also contended that the Arbitral Tribunal had
erroneously awarded idle time charges for a non-major
dredger. The Backhoe Dredger (BHD) was not a major
8


dredger therefore no idle time compensation could have
been claimed or awarded if it had remained idle for any
reason.
18. The Division Bench of the High Court vide judgment and
order dated 15.03.2021 allowed the appeal of the
respondent-Port Trust and directed for the deletion of the
claim awarded by the Arbitral Tribunal as upheld by the
Learned Single Judge of the High Court in respect of Claim
No.7 i.e. idle charges for the Backhoe Dredger (BHD).
19. The aforesaid judgment and order of the Division Bench,
passed in exercise of powers under Section 37 of the Act,
has been assailed by the appellant-Dredging India in this
appeal.

20. Shri Chander U. Singh, learned senior counsel for the
appellant-Dredging India, at the threshold argued that the
scope of Section 37 of the Act is very limited and cannot
extend beyond the ambit of Section 34 of the Act. Therefore,
the Division Bench of the High Court manifestly erred in law
in disturbing the judgment and order of the Learned Single
Judge of the High Court upholding the arbitral award. Since
9


the arbitral award had interpreted the various clauses of the
License Agreement and had recorded a definite finding
thereon in passing the award and as it was found that there
was no scope for interference with it under Section 34 of the
Act, the Appellate Court ought not to have varied or reversed
the same. The interpretation of the clauses of the License
Agreement, as made by the Arbitral Tribunal had to be
accepted and that the appellate court had no jurisdiction to
interpret those clauses in a different manner.
21. In defence, Shri S. Nagamuthu, learned senior counsel for
the respondent-Port Trust, argued that the Division Bench
had rightly set aside the arbitral award in respect of Claim
No.7 as the claim of the appellant-Dredging India for the
delay in handing over the site was under Clauses 41.1 and
41.2 of the License Agreement and, therefore, the Tribunal
could not have awarded compensation under Clause 51.1
which deals with the interruption of work due to port traffic
etc. Secondly, the Arbitral Tribunal could not have relied
upon Claim Nos.5 and 6 which were based on delays due to
traffic in and outside port channel to award any
10


compensation under Claim No.7 which was independent
and the delay was not on account of port traffic. The award
of the claim by the Arbitral Tribunal for Claim No.7 was
patently illegal. The claim for compensation due to idling of
the Backhoe Dredger (BHD) which was admittedly a minor
dredger, was not covered under Clause 38 which only
provided for the compensation for the idling of the major
dredgers.
22. Apart from other things, the broad question which falls for
our consideration is whether the Division Bench in exercise
of powers under Section 37 of the Act was justified to
interfere with the judgment and order of the Learned Single
Judge passed under Section 34 of the Act upholding the
award of the Arbitral Tribunal.
23. The ancillary issues which may arise are: whether the
Backhoe Dredger (BHD) can be categorized as a minor
dredger or is a major dredger; or whether deployment of a
minor dredger was not stipulated under the License
Agreement; and whether on the conjoint reading of Clauses
38, 41.1, 41.2 and 51.1, the appellant-Dredging India is
11


entitled to any compensation for the idling of the said
Backhoe Dredger (BHD).
24. The primary object of the Act is to provide speedy and
inexpensive mode of resolution of disputes through the
process of arbitration with the minimum intervention of the
law courts. In this context, it would be beneficial to refer
and quote Section 5 of the Act which reads as under:-

25. The above Section 5 of the Act contemplates that in matters
of arbitration governed by Part-I i.e. in relation to domestic
arbitration, minimum intervention of the judicial authority
is acceptable unless it is otherwise provided under Part-I of
the Act. In other words, in order to speed up the remedial
measures under the Act in relation to domestic arbitration,
there has to be minimum intervention of the court and, if
necessary, it has to be only in strict compliance with the
provisions of the Act.
12


26. The Act provides for the challenge of the arbitral award
before the court on limited grounds as contemplated by
Section 34 of the Act i.e. where one of the party was under
some incapacity; or where the arbitration agreement itself
was not valid; or the parties were not given proper notice of
the appointment of an arbitrator or the arbitral proceedings;
or was unable, for some reason, to present his case before
the Arbitrator or Arbitral Tribunal; or if the arbitral award
deals with the dispute not contemplated or falling within the
terms of the arbitration or deals with the matters beyond
the scope of the arbitration; or where the constitution of the
Arbitral Tribunal was not in accordance with arbitration
agreement; and, or where the court finds the subject matter
of the arbitral dispute was incapable of settlement by
arbitration or the arbitral award is in conflict with the public
policy of India.
27. In short, apart from the above grounds, the arbitral award
is not open for challenge under Section 34 of the Act on any
other ground. So, the intervention of the court is limited.
Therefore, technicalities apart, the main ground for
13


challenge of the arbitral award in the instant case, which
survives is that of the award being in conflict with the public
policy of India i.e. whether it is in contravention with the
fundamental policy of India or is in conflict with the most
basic notions of morality or justice.
28. In the case at hand, a challenge to the award of the Arbitral
Tribunal before the Learned Single Judge of the High Court
would reveal that it was confined to Claim No.7 and that too
on the merits of the same and not on the ground of violation
of the public policy of India or that it is against the basic
notions of morality or justice.
29. The Arbitral Tribunal, in making the award, has interpreted
the various clauses of the License Agreement so as to hold
that the appellant-Dredging India is entitled for appropriate
compensation with regard to idling of its Backhoe Dredger
(BHD) for want of non-supply of site within time.
Apparently, the challenge to the award of the Arbitral
Tribunal was neither on any of the grounds enumerated
under Section 34, nor even on the ground that the award of
14


the Claim No.7 is against the fundamental policy of India or
the basic notions of morality or justice.
30. That being the position, the award of the Arbitral Tribunal
was not liable to be disturbed under Section 34 of the Act
and was rightly not disturbed. It is settled in law that the
appellate powers under Section 37 are limited to the scope
of Section 34 and cannot exceed beyond it. Certainly,
therefore, if an award is not liable to be disturbed under
Section 34 of the Act, the same could not have been
interfered with in exercise of powers under Section 37 of the
Act.
5
31. In MMTC Limited vs. Vedanta Limited , this Court has
very succinctly laid down the powers of Appellate Court
under the Act. It held as under :-
“14 . As far as interference with an order
made under Section 34, as per Section 37, is
concerned, it cannot be disputed that such
interference under Section 37 cannot travel
beyond the restrictions laid down under
Section 34. In other words, the court cannot
undertake an independent assessment of
the merits of the award, and must only
ascertain that the exercise of power by the

5
(2019) 4 SCC 163
15


court under Section 34 has not exceeded the
scope of the provision. Thus, it is evident that
in case an arbitral award has been
confirmed by the court under Section 34 and
by the court in an appeal under Section 37,
this Court must be extremely cautious and
slow to disturb such concurrent findings. ”


32. In Konkan Railway Corpn. Ltd. v. Chenab Bridge
6
Project , a three-judge bench of this Hon’ble Court has
extensively dealt with the jurisprudence around Sections
34 and 37 of the Arbitration Act. This Court has held that:
“18. At the outset, we may state that the
jurisdiction of the court under Section 37 of
the Act, as clarified by this Court in MMTC
7
Ltd. v. Vedanta Ltd. , is akin to the
jurisdiction of the court under Section 34 of
the Act. Scope of interference by a court in
an appeal under Section 37 of the Act, in
examining an order, setting aside or
refusing to set aside an award, is restricted
and subject to the same grounds as the
challenge under Section 34 of the Act.

19. Therefore, the scope of jurisdiction
under Section 34 and Section 37 of the Act
is not akin to normal appellate jurisdiction.
It is well-settled that courts ought not to
interfere with the arbitral award in a casual

6
(2023) 9 SCC 85
7
(2019) 4 SCC 163
16


and cavalier manner. The mere possibility
of an alternative view on facts or
interpretation of the contract does not entitle
courts to reverse the findings of the Arbitral
Tribunal. ”

33. In Punjab State Civil Supplies Corpn. Ltd. v. Sanman
8
Rice Mills , this Hon’ble Court, while examining the scope
of Section 34 and Section 37 of the Arbitration Act, has held
that:
“20 . In view of the above position in law on
the subject, the scope of the intervention of
the court in arbitral matters is virtually
prohibited, if not absolutely barred and that
the interference is confined only to the
extent envisaged under Section 34 of the
Act. The appellate power of Section 37 of the
Act is limited within the domain of Section
34 of the Act. It is exercisable only to find
out if the court, exercising power under
Section 34 of the Act, has acted within its
limits as prescribed thereunder or has
exceeded or failed to exercise the power so
conferred. The Appellate Court has no
authority of law to consider the matter in
dispute before the arbitral tribunal on
merits so as to find out as to whether the
decision of the arbitral tribunal is right or
wrong upon reappraisal of evidence as if it
is sitting in an ordinary court of appeal. It is

8
2024 SCC OnLine SC 2632
17


only where the court exercising power
under Section 34 has failed to exercise its
jurisdiction vested in it by Section 34 or has
travelled beyond its jurisdiction that the
appellate court can step in and set aside the
order passed under Section 34 of the Act. Its
power is more akin to that superintendence
as is vested in civil courts while exercising
revisionary powers. The arbitral award is
not liable to be interfered unless a case for
interference as set out in the earlier part of
the decision, is made out. It cannot be
disturbed only for the reason that instead of
the view taken by the arbitral tribunal, the
other view which is also a possible view is
a better view according to the appellate
court.
21. It must also be remembered that
proceedings under Section 34 of the Act are
summary in nature and are not like a full-
fledged regular civil suit. Therefore, the
scope of Section 37 of the Act is much more
summary in nature and not like an ordinary
civil appeal. The award as such cannot be
touched unless it is contrary to the
substantive provision of law; any provision
of the Act or the terms of the agreement. ”

18


34. In UHL Power Company Limited vs. State of Himachal
9
Pradesh , a three judges Bench of this Court observed as
under:-
“ The jurisdiction conferred on the courts
under Section 34 of the Arbitration Act is
fairly narrow, when it comes to the scope
of an appeal under Section 37 of the
Arbitration Act, the jurisdiction of the
Appellate Court in examining an order,
setting aside or refusing to set aside an
order, is all the more circumscribed. ”

35. In a recent case of Bombay Slum Redevelopment
Corporation Private Limited vs. Samir Narain
10
Bhojwani , a Bench of this Court, of which one of us
(P. Mithal, J.) was a member, had held that the jurisdiction
of the Appellate Court dealing with an appeal under Section
37 of the Act against the judgment in a petition under
Section 34 of the Act is more constrained than the
jurisdiction of the court dealing with a petition under
Section 34 of the Act.

36. The gist of the aforesaid decisions is that the jurisdiction of
the court under Section 37 of the Act is akin to the

9
(2022) 4 SCC 116
10
(2024) 7 SCC 218
19


jurisdiction of the court under Section 34 of the Act, and,
therefore, the scope of interference by the court in appeal
under Section 37 cannot go beyond the grounds on which
challenge can be made to the award under Section 34 of the
Act. Moreover, the courts exercising powers under Sections
34 and 37, do not act as a normal court, and therefore,
ought not to interfere with the arbitral award on a mere
possibility of an alternative view.
37. In other words, the scope of interference of the court with
the arbitral matters is virtually prohibited, if not absolutely
barred. The powers of the Appellate Court are even more
restricted than the powers conferred by Section 34 of the
Act. The appellate power under Section 37 of the Act is
exercisable only to find out if the court exercising power
under Section 34 of the Act, has acted within its limits as
prescribed thereunder or has exceeded or failed to exercise
the power so conferred. The Appellate Court exercising
powers under Section 37 of the Act has no authority of law
to consider the matter in dispute before the Arbitral
Tribunal on merits so as to hold as to whether the award of
20


the Arbitral Tribunal is right or wrong. The Appellate Court
in exercise of such power cannot sit as an ordinary court of
appeal and reappraise the evidence to record a contrary
finding. The award of the Arbitral Tribunal cannot be
touched by the court unless it is contrary to the substantive
provision of law or any provision of the Act or the terms of
the agreement.
38. Undoubtedly, in the case at hand, the award of the Arbitral
Tribunal is not contrary to any substantive provision of law
or any provision of the Act. Yet, it has been disturbed by
the Appellate Court, apparently by giving a different
interpretation of the clauses of the License Agreement
which jurisdiction was not vested in it. Ordinarily, the
interpretation given by the Arbitral Tribunal, as affirmed by
the court in exercise of powers under Section 34 of the Act
ought to have been accepted.
39. In regard to the contention that the arbitral award was
contrary to the terms of the Licence Agreement, it would be
trite to state that due and proper interpretation of the
various clauses of the Licence Agreement was given by the
21


Arbitral Tribunal and the same also had the approval of the
Learned Single Judge by his judgment passed in exercise of
powers under Section 34 of the Act and as such the
Appellate Court could not have given a different
interpretation to the said clauses. The Appellate Court was
actually bound by the interpretation of the clauses of the
Licence Agreement as given by the Arbitral Tribunal and
accepted by the Court under Section 34.
40. In National Highways Authority of India v. M/s
11
Hindustan Construction Company Ltd. a Bench of this
Court, speaking through Justice Oka, of which one of us
(Shri P. Mithal, J.) was also a member held as under:
“ There cannot be any dispute that as far as
the construction of the terms of a contract is
concerned, it is for the Arbitral Tribunal to
adjudicate upon. If, after considering the
material on record, the Arbitral Tribunal takes
a particular view on the interpretation of the
contract, the Court under Section 34 does not
sit in appeal over the findings of the
arbitrator. ”

In view of the aforesaid decision, if the interpretation
given by the Arbitral Tribunal cannot be disturbed under

11
2024 INSC 388
22


Section 34 of the Act, the same cannot also be disturbed by
exercising powers under Section 37 of the Act.
41. Shri S. Nagamuthu, learned senior counsel for the
respondent-Port Trust, had cited Ssangyong Engineering
and Construction Company Limited vs. National
12
Highways Authority of India (NHAI) , to contend that
when there is patent illegality in the award, the same could
always be corrected in appeal under Section 37 of the Act.
A close reading of the above decision would reveal that in
order to apply the same, first, it has to be established that
there is a patent illegality on the face of the award; secondly,
mere contravention of substantive laws of India by itself is
no longer a ground available to set aside the award; and if
the Arbitrator gives no reason for an award, it would
amount to patent illegality. In the present case, no patent
illegality on the face of the award stands established. The
Arbitral Award is a speaking award with findings and
interpretations based upon reasons. Moreover, there is
apparently no violation of the fundamental policy of any

12
(2019) 15 SCC 131
23


Indian law or the basic notions of morality and justice to
enable the courts to interfere with the award.
42. Insofar as the merits of the case or other ancillary points
arising in the matter as referred to above, it would be
relevant to refer to Clauses 38, 41.1, 41.2 as well as Clause
51.1 of the License Agreement. The aforesaid clauses are
being reproduced hereinbelow for the sake of convenience :-
“Clause 38- STOPPAGE OF WORKS

The Contractor may be instructed to stop
the works from time to time due to security
reasons, moving ships, or any other
reasons as per the instructions of the Port
Authorities.

The Contractor shall furnish idle time
charges for the major dredgers proposed to
be deployed by him in the BOQ. The rate for
idle time charges, quoted by the lowest
Bidder, will be finalized taking into account
the lowest idle time charges quoted by the
other Bidders.

Clause 41.1- POSSESSION OF SITE AND
ACCESS THERETO

Save in so far as the Contract may
prescribe:

a) the extent of portions of the Site of which
the Contractor is to be given possession
from time to time and

24


b) the order in which the Works shall be
executed as may be mutually agreed on
and as per the programme,

c) so much of the Site, and

d) such access as, in accordance with the
Contract, is to be provided by the Employer
as may be required to enable the Contractor
to commence and proceed with the
execution of the Works in accordance with
the programme referred to in Clause 44.1, if
any, and otherwise in accordance with such
reasonable proposals as the Contractor
shall, by notice to the Engineer. The
Engineer will, from time to time as the Work
proceeds, give to the Contractor possession
of such further portions of the Site as may
be required to enable the Contractor to
proceed with the execution of the Works
with due dispatch in accordance with such
programme or proposals, as the case may
be.

Clause 41.2- FAILURE TO GIVE
POSSESSION

If the Contractor suffers delay and/or
incurs costs from failure on the part of the
Employer to give possession in accordance
with the terms of Sub-Clause 41.1, the
Engineer shall, after due consultation with
the Employer and Contractor, determine
any extension of time to which the
Contractor is entitled under Clause 43.1,
and the amount of such costs which shall
be added to the Contract Price and shall
notify the Contractor accordingly.


25


Clause 51.1- INTERRUPTIONS TO WORK

The Contractor shall allow in his rates for
any loss of working time due to weather,
surveying, positioning of craft, shifting of
dredger/equipment during maintenance.
Idle time of the dredger/equipment
exceeding a continuous period of 4 (four)
hours due to interruption caused by Port
traffic, berthing, unberthing, or shifting of
vessels and other operations in the Harbour
basin and Approach Channel, excluding the
specified times under Sub-Clause 6.0
Section III shipping operations (i.e., from
07.00 hours to 14.00 hours) as
instructed/agreed by the Engineer, shall be
paid for at the quoted rates included in the
Bill of Quantities, subject to the Engineer
being notified by the Contractor within 12
hours on each occasion of such
interruptions. The idle time for such
payment shall be reckoned as the total time
in one continuous interruption minus 2
hours. Berthing programme of vessels will
be provided every day after berthing
meeting at 12.00 hours or when ETAs are
made available to Port by shipping
agencies.

Notice will be given approximately 1 hour
before the sailing of vessels, and the
Contractor shall contact the Port Marine
Department for any information in this
regard. No claim whatsoever for additional
payments on account of the specified
interruption will be entertained. ”

26


43. The aforesaid Clause 38 though speaks about stoppage of
work and about idle time charges for the major dredger
deployed by the contractor i.e. the appellant-Dredging
India, but it nowhere prohibits the appellant-Dredging
India to claim compensation in respect of any other
equipment including Backhoe Dredger, if it remains idle.
The aforesaid Clause 38 cannot be read so as to mean that
since it provides for idle time charges for major dredgers,
compensation in respect of other equipment or
minor/special dredgers is not permissible.
44. Clauses 41.1 and 41.2 provide for the consequences of
failure on part of the respondent-Port Trust to give
possession of the site in time including extension of time
and costs. However, this does not ipso facto mean that idle
time compensation would not be admissible if the site is not
made available for any other reason covered under the
terms of the License Agreement.
45. The aforesaid Clauses 41.1 and 41.2 cannot be read in
isolation. If we read the aforesaid clauses of the Licence
Agreement conjointly with Clause 51.1, it would be evident
27


that idle time charges or compensation are available even if
any equipment is kept idle on account of delay or non-
providing of the site for operation within time. In view of
Clause 51.1, the argument that since the Claim No. 7 was
virtually under Clauses 41.1 and 41.2, the Arbitral
Tribunal could not have awarded claim under Clause 51.1
is misconceived, inasmuch as it is settled in law that if the
power to grant a relief is available under the Act or the
terms and conditions of the Licence Agreement, it is
immaterial as to under which clause the same is claimed.
46. In the instant case, the power to award compensation for
idle time of the equipment including Backhoe Dredger is
traceable to Clause 51.1 of the Lease Agreement and
therefore the Arbitral Tribunal was not wrong in
interpreting the clauses so as to make an award in favour
of the appellant-Dredging India under Claim No. 7. In such
a situation, the interpretation given by the Arbitral Tribunal
is apparently a plausible view and was rightly not disturbed
by the Learned Single Judge in exercise of power under
Section 34 of the Act. Therefore, in appeal under Section 37
28


of the Act, the said reasoning could not have been disturbed
so as to permit a different view. The interpretation given by
the Arbitral Tribunal had to be accepted by the Appellate
Court.
47. In paragraph 15 of Larsen Air Conditioning and
13
Refrigeration Company vs. Union of India & Ors. , this
Court observed that the limited and extremely
circumscribed jurisdiction of the court under Section 34 of
the Act, permits the court to interfere with an award, sans
the grounds of patent illegality but if an arbitrator
construes a term of a contract in a reasonable manner, it
will not mean that the award can be set aside on that
ground.

48. In the case at hand, the Arbitral Award contains logical
reasons in construing the various clauses of the License
Agreement and the view taken by the Arbitral Tribunal had
been accepted by the court under Section 34 of the Act as
a reasonable and a possible view. Therefore, in the light of
above referred decision of Larsen Air Conditioning

13
(2023) 15 SCC 472
29


(supra) , the Arbitral Award could not have been set aside
even if there was a possible second view regarding the
interpretation of the clauses of the License Agreement.
49. In the light of the above discussion, the ancillary issues,
whether the Backhoe Dredger (BHD) is a minor or a major
dredger or whether it could have been deployed for the
project work, pales into insignificance. The License
Agreement permits deployment of Backhoe Dredger (BHD)
without specifying whether it is a minor or a major dredger.
Moreover, as discussed earlier, it was open for the
appellant-Dredging India to deploy the equipment as may
be felt necessary by it, and, therefore, the deployment of the
Backhoe Dredger (BHD) was not contrary to any terms of
the License Agreement.
50. In view of the aforesaid factual and legal position, we are of
the opinion that the Appellate Court manifestly erred in law
in interfering with the judgment and order of the Learned
Single Judge of the High Court passed under Section 34 of
the Act so as to disturb the arbitral award in respect of
Claim No.7.
30


51. Before parting, we consider it proper to note that the Act is
a special enactment which aims to resolve
contractual/commercial disputes through arbitration with
the minimum intervention of the court, if not without the
intervention of the court. In the event, the courts are
allowed to step in at every stage and the arbitral awards are
subjected to challenge before the courts in hierarchy before
court of first instance, through regular appeals and finally
by means of SLP/Civil Appeal before the Supreme Court, it
would obviate/frustrate and defeat the very purpose of the
Act. It is therefore, necessary to accept the arbitral award if
it is not patently illegal or does not fall within the scope of
intervention under Section 34 of the Act. The appeal thereof
has a much narrower scope of intervention particularly
when the arbitral award has been upheld under Section 34
of the Act. The appellate jurisdiction acquires little
significance only when the arbitral award has been
erroneously upheld or set aside by the court in exercise of
its power under Section 34 of the Act as discussed earlier,
31


but has no authority of law to consider the matter which
was before the Arbitral Tribunal on merits.
52. In the light of the above discussion, in our opinion, the
impugned judgment and order dated 15.03.2021 passed by
the Division Bench of the High Court under Section 37 of
the Act is unsustainable in law and is accordingly set aside.

53. The appeal is allowed with no order as to costs.


...................………………………….. J.
(PAMIDIGHANTAM SRI NARASIMHA)


.............……………………………….. J.
(PANKAJ MITHAL)
NEW DELHI;
JANUARY 07, 2026.
32