DP World's contract to manage and run the container terminal at India's Mundra port in Gujarat state has been terminated.

Reports say that the Adani Group-owned Mundra Port and Special Economic Zone (MPSEZ) officially served notice on DP World to cease operations and facilitate the transfer of assets in three weeks.

The Adani Group owns and runs Mundra, which is India's largest privately owned and operated port.

The right to operate and develop the 1.5 million TEU (twenty-foot equivalent unit) per year capacity  Mundra International Container Terminal (MICT) was originally awarded to the Adani Group.

The Adani Group then sold the rights to Britain's P&O ports in 2003.

In February 2006 however, DP World acquired P&O Ports which resulted in the transfer of management and ownership of Mundra's container facilities to the Dubai state-owned operator.

According to the Gujarat Maritime Board (GMB), the transfer was a breach of an undertaking given by P&O Ports when it acquired the facilities from the Adani Group.

The undertaking required P&O Ports to hold a minimum shareholding of 51% in MICT for seven years from the date of acquisition.

The Gujarat Maritime Board maintains that the company also agreed to seek prior approval before selling any part of its 51% stake in MICT.

The Gujarat Maritime Board then issued a show-cause notice to DP World requesting a reason why the contract should not be canceled.

DP World went to the courts seeking legal redress.

The Adani Group's latest move comes on the back of a letter from the Gujarat state government informing MPSEZ that DP World's take-over is a violation since it had not sought approval from the GMB.

The Gujarat state government has reportedly criticized sub-concession agreements between the Adani Group and P&O Ports regarding new terminals.

DP World has also been involved with a legal battle against the Adani Group for not allowing it to operate the second container terminal at Mundra.

DP World senior vice-president and subcontinent managing director Ganesh Raj has been quoted saying that “there are no provisions for terminating the contract...MICT is still owned by P&O Ports, and there is no change in ownership.”