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SC refutes Cox and Kings claims on Maharajas Express


By Harren Lee on Jul 09, 2012

Maharaja Express India
Maharajas Express: The Royal India Train

The Supreme Court has disproved the claims by leading tour operator, Cox and Kings, on running the flagship luxury IRCTC train, the Maharaja Express. The status of the joint venture, which started as a joint venture between IRCTC and Cox and Kings, is now in the darks with the apex court not recognizing the latter’s role in the project anymore. The project started with an initial investment of Rs. 40 crore and could incur considerable losses for Cox and Kings having made large investments in the venture.


The judgment was taken after the tour operator had appealed to the Delhi High Court against IRCTC’s abrupt decision to end the 15 year lease arrangement with Cox and Kings after the train had completed 34 cross-country journeys. The plea was rejected with the petitioner being advised to file for compensation of damages incurred with the contract termination.


The two collaborators had earlier incorporated a joint venture firm by the name of “Royal India Rail Tours Ltd.”, under the aegis of which the Maharajas’ Express project was undertaken. As per the firm’s MoU, Cox and Kings was to be an equal shareholder for a period of 15 years, extendable by another 10 years upon mutual agreement of the two corporations.


The Supreme Court bench of Justices J Chelameshwar and Altamas Kabir dismissed Cox and Kings’ argument of the joint venture being akin to a partnership saying, “It is no doubt true that Cox and Kings has invested large sums of money in the project, but that cannot entitle it to pray for and obtain a mandatory order of injunction to operate the train once the lease agreement or arrangement had been terminated”. The bench also added, "If an Arbitral Tribunal is appointed, the aforesaid arrangement (for running the train) would be subject to the decision of the Arbitral Tribunal." Cox and Kings could not be reached for its comments on the judgment.
 


Harren Lee

Harren Lee is working with Indian Luxury Train in the capacity of Senior Editor for last 2 years.


Posted on Jul 09, 2012

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