BackDP World files case against Adani over Mundra project
DP World files case against Adani over Mundra project
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Dubai government-owned DP World, the world’s fourth biggest port operator, has taken legal recourse to prevent Adani Group from terminating a contract signed by the two firms in May 2003 to operate a container terminal at Mundra Port in Gujarat for 28 years.
DP World-run Mundra International Container Terminal has filed a case in Ahmedabad high court seeking a stay on the 8 November termination notice issued by Adani Group-promoted Mundra Port and special economic zone (SEZ).
“We have submitted before the court that the termination move was illegal and that it should put an immediate stay on the termination proceedings and should be dismissed," said Ganesh Raj, senior vice-president and managing director, India subcontinent, DP World.
Through the 8 November notice, the Adani Group, which owns Mundra Port, had moved to terminate the contract with DP World and start discussions on transferring the assets within three weeks.
The Mundra terminal came into DP World’s ownership after it acquired British port operator P&O Ports in February 2006.
However, the Gujarat Maritime Board (GMB), the maritime regulator of Gujarat, had dubbed the takeover as “illegal" as its permission was not sought.
P&O Ports had originally acquired the rights in May 2003 to operate and manage a container terminal at Mundra port from the Adani Group for $195 million (Rs768.3 crore). DP World had argued that there was no condition in the contract that required prior permission from GMB before taking over the Mundra terminal.
DP World and the Adani Group are also locked in a separate legal battle over rights to operate a second container terminal at Mundra Port.
This is the first instance of a port operating contract getting into legal hurdles after India opened its ports sector to foreign and private investors in the late 1990’s.
Merged Kingfisher-Deccan airline can fly abroad: Patel
A merger of Deccan Aviation Ltd, which runs the low cost Deccan airline, and Kingfisher Airlines Ltd may be critical to the latter’s plans to fly abroad next year on international routes, civil aviation minister Praful Patel said on the sidelines of the World Economic Forum, here.
Bangalore based UB Group owns 46% in Deccan apart from running the two-year old Kingfisher Airlines. While Deccan completes the “five year experience" norm in August 2008, there has been speculation whether Kingfisher airlines can fly abroad using the former’s bilateral rights.
Deccan has sought government rights to fly long haul routes in the US and Europe. But, the aircraft for such flights have only been bought by Kingfisher and its first such aircraft lands by next March-end.
“A merger is a merger," Patel said, adding that after this (the merger) whoever uses the bilaterals on international routes is irrelevant.
“As far as Deccan is concerned, it has the right to go abroad. They are completing five years. And if there is a merger between Kingfisher and Deccan, why should we have an objection," Patel said, clarifying that post-merger, the airline can fly anywhere.
Deccan’s stock has been rising over the past few weeks on similar market rumours. Separately, Patel said Air India will be looking at an initial public offering soon. “We have said we would like to have a 10-15% disinvestment from the current ownership and infuse money into it and also let employees be a party to the higher valuation." He, however, did not specify a time frame for this.
(By A Staff Writer)
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