TARIFF AUTHORITY FOR MAJOR PORTS

NOTIFICATION

New Delhi, the 1st March, 2001

•

;

Port Trusts Act, 1963 (38 of 1963), the Tartff Authority for Major Ports hereby disuses"erf the^ eoresen

charges at the Chennal Port Trust, as in the Order appended hereto.

fiV.w/vw*

THE GAZETTE OF INDIA EXTRAORDINARY

[PART III—Sr,r, 4|

SCHEDULE

Case NO.TAMP/111/2000-CHPT

The Chennal Steamer Agents' Association

The Chennal Port Trust (CHPT)

- - -

. _ _

Applicant

Respondent

Ft P

E re

(Passed on this 14th day of February 2001)

This case relates to a representation submitted by the Chennai Steamer

Agents' Association (CSAA) relating to fixation of container storage charges at the Chennai

Port Trust (CHPT).

In its representation, the CSAA has given the following points:

(I).

In July 1994, container storage charges were considerably enhanced by the

CHPT. The CSAA filed a petition in the High Court of Madras and stay was

obtained on 11 July 94.

(ii).

The CHPT, set up a Sub-Committee in 1995 and revised the rates

denominated in US $. This was approved by the Ministry of Surface Transport

on 19 July 1995 retrospectively with effect from 6 July 1994. As the rates for

certain slabs were still on the high side and some now elements were

introduced, the another writ petition (WP No.5806 of 1997) was filed in April

1997 and stay was extended.

(ni).

In the meanwhile, the TAMP undertook a general revision of the CHPT and an

Order passed on 22 March 2000. However, this item was excluded as it was

subjudice.

(iv).

The two Writ Petitions came up for final heantig in February/August 2000 and

the Hon'ble High Court struck down the two Port Trust Notifications and

illowed the Writ Petitions.

(v).

After learning that the CHPT was going in Appeal against the judgment, the

CSAA requested the CHPT to withdraw the Appeal and seek the Intervention

of TAMP to revise the Container Storage Charges which could not be done

earlier.

(vi).

As there was no response from the CHPT, the CSAA has approached the

TAMP to intervene and do the needful as it felt that such a course of action

would be in the best interests of both parties saving on time and legal

expenses.

3.1.

The rf presentation of the CSAA was forwarded to the CHPT and various

users/representative budies of users for their comments. Comments received from them are

summarised below:

The Container Shipping Lines Association (CSLA)

The arbitration by the TAMP should be most helpful as otherwise a protracted legal

process will ensue to the detriment of the Port, the Steamer Agents' Association and

ultimately to the trade. Therefore, the TAMP should intervene in the matter and secure

a commercial settlement.

Madras Chamber of Commerce and Industry (MCCI)

(i).

The representation made by the CSAA has valid arguments and the TAMP

must intervene and adjudicate on the container storage rates.

(u).

The TAMP was not in existence when these disputed container storage

charges were promulgated by the CHPT In 1994.

(in).

The TAMP was unable to include container service charges in the gamut of

Port tariff revision ordered in March 2000, as the matter was subjudice, but

after pronouncement of judgment on 28 August 2000, the matter was no longer

subjudice. The CHPT should then have to use this opportunity to bring up the

matter to TAMP for a final decision. As to the dispute regarding the rates

levied in 1994, these can be struck down as per the judgment of the High

Court.

(iv).

By directly proceeding to appeal against this judgment, the CHPT has

excluded utilising the services of TAMP which was specially set up by the

Government of India for Port tariff and instead continues to waste the Court's

time.

(v).

The situation prevailing in 1994 has since been changed. As many as 11 off

Dock CFSs are now active which give ample opportunity for the importers to

have their FCL containers moved away from the Port premises, result'ng in

less congestion at the Port Trust premises. Therefore, there is little chance for

the port trust premises being congested and in turn this defeats the argument

of the Port Trust that their extraordinarily high storage rater; were to act as an

disincentive for consignees to leave their boxss inside the port trust premises.

Legal recourse is unwarranted since the issue at dispute have been rendered

almost academic by the turn of events subsequent to 1994.

The Hindustan Chamber of Commerce (HCC)

The two levies collected by the Port Trust on cargo imported in containers are

demurrage charges levied on the cargo on a per MT basis which is collected

from the consignee and the container storage charges which is co'lected from

the shipping lines. The shipping lines in turn collect the storage charges f.oi.i

the consignee when approached for delivery order. Hence, both the levies art

borne by importers only As the Shipping Lines have running accounts wit' i the

Port Trust, the storage charges are debited to this account on a regular b^s «;

and even for containers that are abandoned which is a loss to them.

(II).

The CHPT had been facing the problem of increasing dwell time on imported

FCL containers and this was also resulting in congestion at the Container

Terminal. In order to reduce the congestion the CHPT increased the container

storage charges in 1994. The increase was, however, very steep

(in).

Prior to 6 July 94, the Steamer Agents used to absorb the container storage

charges

However, after the rates were increased abnormally by the CHPf,

the Steamer Agents have started collecting storage charges from the

consignees

Hence, in actual, the Steamer Agents are fighting this in the

interest of the consignees and protecting themselves from the prospect of

losing laige sums of money when the consignment is abandoned.

(iv)

The CHPT should call the Steamer Agents Association for a discussion and

amicably settle the issue with negotiating and fixing the rate notified bytheGOl

in the order dated 17 September 95 with effect from 1 April 98 with regard to

the Container Storage Charges and for the Shut out, extra Movement, and

removal charges may be implemented from 1 April 2000.

THE GAZb'lTB OF INDIA EXTRAORDINARY

[PART III—SEC 4]

(v).

The TAMP can consider and notify new rates, I.e., the container storage

charges for FCL containers be deleted and the demurrage charges be

increased after 15 days after permitting the 10 free days allowed today.

Tho SouthTn India Chamber of Commerce and Industry (SICCI)

The disputed container storage charges were promulgated by the Chennai Port

Trust way back 94 when the TAMP was not established. Since the TAMP has

now come into existence and in view of the useful role played by the TAMP it

will be better if the TAMP can arbitrate in the matter and settle the issue once

for all This will also save considerable time to all parties concerned with the

Issue.

The Indian Rational Shipowners' Association (INSA)

The TAMP should intervene and call for all relevant data from all parties concerned and

give its considered decision.

The Shipping Corporation of India (SCI)

The TAMP may take up the representation made by the CSAA.

3.2.

The CSAA vide its letter dated 12 December 2000 has forwarded a copy of the

legal opinion of Shri. C.A. Sundaram, Sr. Advocate, Chennai who opined that the TAMP's

Order can be extended to Customs notified Off-Dock CFSs operating in Chennai and the TAMP

has the authority to refix the container storage charges during the pendency of WAs and also

limit levy of storage charges on containers to a period of 75 days.

The CHPT vide its letter dated 27 December 2000 has submitted its

comments. The CHPT has stated that in respect of container storage charges, CHPT has

obtained stay against operation of th* judgment by learned single judge and the Division Bench

of the Hon'ble High Court has ordered for payment of container storage charges as per revised

tariff of 19 July 05 from 22 November 2000 by the Respondent (CSAA). The CHPT has

mentioned that final action in the matter can be taken only after the outcome of appeal filed by

CHPT

The CHPT has requested the Authority to defer this proceeding, since the matter is

subjudice.

5.1.

A copy of the above letter of the CHPT has been forwarded to the CSAA and

also to other various users / representative body of users for their specific comments on why

the request of the CHPT shall not be accepted.

b.2

The HCC, CSAA and SCI have sent their comments on the views of the CHPT,

which are summarised below:

Tho Hindustan Chamber of Commerce (HCC)

The judgment against which the CHPT has gone on appeal also had directed

the Port that they should hold discussion with the CSAA. Hence, TAMP can

act as an arbitrator and decide the issue by holding joint meeting wherein the

views of the port and the Steamer agents can be discussed and a consensus

can be arrived at The decision of TAMP can be filed with the Court for final

disposal as the court will ha\-e no objection to this arrangement The port will

also be able to find a way out from the long drawn litigation that may follow if

the issue is not settled.

The Chonnai Steamer Agents' Association (CSAA)

(i).

When there was a general revision of the CHPT Scale of Rates in April 2000,

this particular item 'container storage charges' was excluded by the TAMP as it

was subjudice

(II)

The Judgment in the WPs Nos. 11747 of 1994 and 5806 of 1997 was

pronounced on 28 August 2000 and the CHPT had one month time to decide

whether to prolong the litigation or to refer the matter to TAMP to revise the

rates which had to be omitted during the general revision. Instead, the CHPT

have filed Writ Appeals which action is cantankerous. At this juncture the

CSAA wrote to the Chairman, (CHPT) and personally appealed to him to refer

this matter to TAMP for a speedy and early resolution of the issue relating to

container storage charges.

(in).

When there is an alternate body specifically created to revise port tariff (Scale

of Rates), the CHPT should have approached the TAMP instead of continuing

the litigation.

(iv).

User Bodies like the HCCs, INSA and Chennai Custom House Agents

Association who have a nominee on the CHPT Board have already written to

TAMP seeking its intervention in the matter with a view to end the litigation.

The MCCI and CSLA have also made a similar request.

Tha Shipping Corporation of India (SCI)

(l).

The contention of CHPT that the matter is subjudlce and, a such, TAMP cannot

intervene in the matter is totally misleading and not in the interest of the trade.

The CSAA has very clearly set out the reason as to why the request should not

be granted, vide their letter dated 9 January 2001. The matter, regarding the

revised storage charge is no longer subjudice as far as the prospective cases

are concerned

Recently, CHPT has started qualifying the container bills with a condition that

the difference in charges between the pre-revised and revised rates will be

collected separately

It is, therefore, amply clear that the matter is no longer

subjudice as it has been cleared by the court, vide their order dated 22

November 2000 stating that the trade will have to pay the container storage

charges at the rates as per the revised tariff from 22 November 2000 The

applicability of the revised tariff for the period from 6 July 94 to 21 November

2000 is only required to be decided by the court

(in).

The revised tariff which has been cleared by the court is not only exorbitant but

also the highest among all Indian ports which definitely requires to be reviewed

again. It is, therefore, felt that the TAMP should intervene in the matter and the

views of the trade should be heard which may help the TAMP to weigh the

reasonabillty of the tariff which has been imposed upon the trade

The CSAA has sent another representation vide its letter dated 4 January 2001

for consideration at the joint hearing The CSAA has enclosed genesis and chronoluqy of the

case, comparison of storage charges in main Indian ports comparison in ftf»p d ^jy ^c in ma n

Indian ports and salient points to be considered The Tiain points are given belo/»

(i).

The CHPf notified charges are already arbitrary, exorDitant, and with no

relationship to the service rendered or to the tariffs prevailing in other Indian

Ports

(n).

Prolonged litigation to resolve this issue is a dram on the time and resources of

both CHPT and CSAA.

(in)

TAMP is the Statutory body empowered by the Government of India to

adjudicate on tariff matters in Major Port Trusts

THE GAZETTE OF INDIA EXTRAORDINARY

[PART III—SEC 4]

(iv).

The CSAA prays for the intervention of TAMP in this long pending dispute and

requests the action of TAMP In:

(a).

Notifying storage charges in Chennai Port prospectively in line with the

tariffs in other main ports, giving due cognisance to the very limited

free time extended to users in CHPT.

(b).

Formalising the application of the storage tariff prevailing in June 1994,

through the period from July 1994 till the commencement date of the

new tariff to be fixed by TAMP.

A joint hearing in this case was held on 25 January 2001 at the CHPT

premises in Chennai, At the joint hearing the following submissions were made:

The Chonnal Steamar Aqants' Association (CSAA)

(i).

The Court has not restrained the TAMP from looking into the matter

prospectively.

(n).

CHPT says, it is a deterrent Is it against congestion by Trade or against Lines

bringing in containers^

(in).

There are enough off-dock CFSs now.

(iv).

Port is duly bound not only to receive containers but also to provide for

reasonable storage facilities.

(v).

Rates are abnormally high.

(vi).

When this rate was notified in 1995, TAMP did not exist, That is why we now

want TAMP to review and revise the rates.

(vn).

In the general revision, this tariff was not covered on the sub judice

consideration. Now that the Court has cleared a prospective consideration, the

CHPT should go back to the TAMP

The Shipping Corporation of India (SCI)

Port has accepted the ruling about prospective application. That shows they are willing

to discuss the whole matter. Where is sub judice?

The Chennai Port Trust (CHPT)

(i).

Retrospective application was ordered by the Government.

(M).

The whole matter is still in the court

(HI).

The court has implicitly accepted the reasonableness of the rate

(iv)

OnK the 'date of effect' remains to be settled The CHPT is willing to fix the

date as July 95. There can be a settlement

(v).

If we reduce the rdte today, theie will be audit objection

Further, it can also

weaken our case in the court.

With reference to the totality of information collected during the proceedings of

this case, and taking Into account the arguments advanced at the joint hearing, the following

position emerges:

(i).

This rate was not taken up for review/revision at the time of the general

revision of the Scale of Rates ordered by this Authority in March 2000 as the

matter was then pending before a Single Judge Bench of the Madras High

Court.

(ii).

The case has since been disposed of by the Single Judge Bench. The case

was decided in favour of the Petitioners viz., the CSAA.

(in).

The CHPT has gone up in appeal to a Division Bench of the Madras High

Court which has stayed operation of the impugned Order while permitting levy

of the revised rates prospectively with effect from 22 November 2000.

(Iv).

The Court has not restrained this Authority from taking up this case for

prospective consideration. This fact has been highlighted by the CSAA to urge

this Authority to intervene in the matter. They have also sent a copy of an

opinion given by their Counsel to the effect that, notwithstanding the pendency

of the appeal before the Division Bench, this Authority can intervene in the

matter.

While this legal issue can be argued both ways, the balance of convenience

would seem to lie in favour of non-interference. It has, in this context, to be

recognised that what is in reference, in fact, is an order of a Judge of the High

Court. Any analysis by and any order of this Authority even on a prospective

perspective can be seen to amount to expression of opinions about the

impugned order. And, it will not at all be appropriate for this Authority to be

seen in that position.

(v).

The action taken by the CHPT to go up in appeal to a Division Bench cannot

be faulted. There is no way in which the impugned order could have been

challenged in the forum of this Authority.

Incidentally, there is also an observation in the impugned order that there could

be no retrospective prescription of tariffs. But, according to the Ministry of Law,

this Authority has the power in special circumstances to notify tariff rates with

retrospective effect also.

In the event, it is best that a proper Appellate

Authority decides on this issue also.

If there is to be any parallel proceedings in the forum of this Authority without

prejudice to the merits of the appeal filed by the CHPT, it can best be so only in

pursuance of a directive to that effect from the Division Bench concerned.

Otherwise, the vulnerability/sensitivity cited in paragraph (iv) above will still

loom as a hurdle for this Authority to intervene.

The Petitioners will, therefore, be well advised to approach the Division Bench

concerned for such a directive.

(vi).

It can possibly be argued that there will be no legal hurdle to the CHPT

approaching this Authority for a prospective prescription of the tariff in this

case. But, as has been contended by the CHPT, it will have two real difficulties

to reckon with in such a contingency:

(a).

There can be an audit objection about the sudden reversal of its stand.

(b).

Any acceptance of a lower rate (even) pfospectively can have a

repercussion of weakening its appeal case before the Division Bench.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—She 4]

(vn).

The CSAA and other users have advanced arguments about the CHPT being

duty bound not only to receive containers but also to provide for reasonable

storage facilities, there being enough off-dock CFSs now, etc. In the backdrop

of the legal position described above, it is not necessary for this Authority at

this stage to go into the merits of the case.

(viii).

Some of the user-bodies have pleaded that, in the alternative, this Authority

may arbitrate in the matter. This is not possible since, for arbitration, both the

parties have to consent; and, equally importantly, this Authority is an

adjudicative and not an arbitral body.

In the result, and for the reasons given above, and based on a collective

application of mind, this Authority decides that it is not legally appropriate for it to intervene in

the matter at this stage. That being so, the representation of the Chennai Steamer Agents'

Association is rejected.

S. SATHYAM, Chairman

[Advt/lll/IV/143/2000/Exty.]

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