In Brief
A consortium led by PSA Mumbai (a Singapore company) submitted a bid for a container terminal project at Jawaharlal Nehru Port. The Port Authority issued a Letter of Award, which the consortium acknowledged. However, owing to changes in consortium composition and delays, the Letter of Award was later withdrawn. The Port Authority then invoked an arbitration clause in the draft Concession Agreement to claim damages. The Supreme Court held that the Letter of Award was not an absolute and unqualified acceptance constituting a binding contract. Multiple steps (SPV incorporation, performance guarantees, formal agreement signing) remained, and the bidding process itself explicitly disclaimed being an agreement. Therefore, no contract existed at the Letter of Award stage, and the arbitration clause did not apply to the bid-stage dispute. The appeal was allowed and the arbitrator's order (dismissing the arbitration) was reinstated.
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