The Madras High Court has expressed concern regarding the confusion caused by law reports in referencing a Supreme Court Constitution Bench decision on the modification of arbitral awards. This observation was made in the context of the case VOC Port Trust v. Flemingo Duty Free.
Paragraph Numbering Leads to Misinterpretation
The Bench, consisting of Justices GR Swaminathan and MD Sumathi, noted an issue in the case Gayatri Balasamy v. ISG Novasoft Technologies Limited where the continuous numbering of paragraphs across majority and dissenting opinions led to misinterpretation. Readers mistakenly believed the final paragraph to contain the definitive answer to the legal query posed.
“Due to the continuous numbering of paragraphs from both majority judges and Justice K.V.V.J, many readers assumed the final paragraph contained the answer, which was contrary to the majority’s view. We urge law reporters to prevent such confusion in the future,” stated the Bench.
Context of the Observation
The observation arose while resolving appeals in a dispute between VO Chidambaranar Port Trust and Flemingo Duty Free Shop concerning the Tuticorin-Colombo ferry service. Launched in June 2011 as part of an India-Sri Lanka economic initiative, the service ceased in November 2011, leading to arbitration.
The arbitral tribunal primarily dismissed Flemingo’s claims but ordered a refund of an encashed bank guarantee with 13% interest, rejecting the Port Trust’s counterclaim. However, the Principal District Court at Thoothukudi later granted Flemingo an additional ₹68.40 lakh as liquidated damages with 18% interest, overruling the tribunal’s rejection of this claim.
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The High Court overturned this part of the district court’s order, citing Gayatri Balasamy to emphasize the limited powers courts possess to alter arbitral awards. Courts are restricted from reassessing evidence or providing relief that the tribunal had denied. The High Court criticized the district judge for effectively “rewriting the award” by granting liquidated damages.
Interest Award and Legal Representation
Despite setting aside the liquidated damages, the High Court refused to reduce the 13% interest on the bank guarantee refund. VO Chidambaranar Port Trust’s legal team included Additional Advocate General B Saravanan and Advocate A Arivuchandran, while Flemingo Duty Free Shop was represented by Senior Advocate C Mani Shankar, briefed by Vast Law Associates.
Concerns Beyond the Madras High Court
Additionally, the Delhi High Court recently criticized legal resource websites like Manupatra and SCC Online for altering paragraph numbers and grammar in court judgments, raising similar concerns about misinterpretation.
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The full judgment can be accessed [here].
