DP World is suing the Adani Group for not allowing it to operate the second container terminal at Gujarat state's port of Mundra.

The Adani Group manages and owns a stake in Mundra which is India's largest privately owned and operated port.

The legal action follows a deal between the Adani Group and P&O Ports (later acquired by DP World) which gave P&O Ports rights to run the port's first container terminal – Mundra International Container Terminal (MICT).

Under the deal, the Adani Group was mandated to hand over the second terminal for $70 million after the first terminal handled 700,000 TEUs per year or eight years of operating the first terminal (February 17 2009), whichever was earlier.

Local news reports say that MICT handled 521,000 TEUs in the 12 months ending in March 31 this year and according to original agreements MICT has to pay the Adani Group 10% of its gross revenue.

The Adani Group meanwhile, had in August begun operation of the 1.25 million TEUs per year second container terminal at the Mundra Port and Special Economic Zone (Mundra Port and SEZ).

Mundra Port and Special Economic Zone Ltd is part of the Adani Group of companies.

DP World then filed an application before the Ahmedabad civil court seeking to prevent the Adani Group from operating the new facilities on its own but the court rejected the application on September 13.

DP World is now challenging the order before the Gujarat high court and has submitted the matter for arbitration.

Adani Group chairman Gautem Adani has replied the suit stating that MICT has “neither reached the 700,000 TEUs nor completed eight years of operations for staking claim to run the second terminal which is ready for operations.”