Energy Dispute - The Legal Chamber

In a significant ruling, the Supreme Court clarified that compensation for wrongful diversion of electricity under a Power Purchase Agreement is distinct from the reimbursement of fixed charges. The Court held that the beneficiary is entitled to both remedies concurrently, reinforcing the 'proportionate principle' and preventing unjust enrichment by the power generator. Facts Of The Case: The dispute originated from a 1996 Power Purchase Agreement (PPA) between Gujarat Electricity Board (GEB, later GUVNL) and Essar Power Limited (EPL). EPL's plant had a total capacity of 515 MW, with 300 MW allocated to GEB and 215 MW to its sister concern, Essar Steel Limited (ESL). The core issue arose when EPL began supplying more power to ESL from GUVNL's allocated 58% share, violating the ag...

The Supreme Court upheld the Appellate Tribunal for Electricity's (APTEL) ruling that a Coal India Limited (CIL) notification imposing Evacuation Facility Charges (EFC) constitutes a "change in law" event under the Power Purchase Agreement (PPA). The judgment affirmed that the power generator is entitled to compensation from the notification date with carrying cost at Late Payment Surcharge (LPS) rates on a compounding basis, based on restitutionary principles. The Court clarified that only a substantial question of law is appealable, and the supplementary bill is required only after due adjudication. Facts Of The Case: A Power Purchase Agreement (PPA) was signed on January 28, 2010, between Rajasthan Discoms and Adani Power Rajasthan Ltd. for 1200 MW. On December 19, 2017, Coal India ...

Tag: Energy Dispute

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