GOVT DABHOL POWER IN MASSIVE EFFORT TO UNTANGLE LEGAL CASES

A gigantic exercise of untangling legal cases awaits the government and Dabhol Power Company (DPC) before the actual work on re-starting the controversial 2184 mw Dabhol power plant can begin.
The finance ministry, along with the Indian lenders to the now closed project, is burning midnight oil to examine how as many as 16 legal cases which DPC and the Indian government are fighting against each other in and outside India can be extinguished in the light of the agreement with GE and Bechtel.
Such an exercise is warranted in view of the sharing of the "term sheet" (the nitty-gritties of the agreement) by the GE-Bechtel combine and the finance ministry for the settlement of the former's dues at $305 million.
Some of these cases await orders. The list includes claims of Rs 26,000 crore made by the now fallen DPC in the London arbitration against the Government of India (GoI), the proceedings of which are to begin in July. The US government promoted Overseas Private Investment Corporation (Opic) has launched arbitration on November 8, 2004 against GoI with claims of $111 million. This apart, there is a power purchase agreement (PPA) arbitration initiated by DPC against Maharashtra State Electricity Board (MSEB), the shareholder arbitration and related litigation on the reconstitution of the DPC board, and contempt proceedings against MSEB's arm Maharashtra Power Development Corporation Ltd (MPDCL) initiated in the southern district court, New York. The status of these cases was reviewed at the recently held meeting of the Group of Ministers (GoM).
There are arbitration proceedings initiated by Capital India Power Mauritius (CIPM) against GoI under Indo-Mauritian bilateral treaty. Besides, Offshore Power Production (OPP), a limited liability partnership organised under the laws of Netherlands that owns -- through its subsidiary company Enron Mauritius Company (EMC) -- a 65% interest in DPC, has filed a notice of claim under the Indo-Netherlands Investment Promotion Treaty. MSEB has intitiated proceedings before the MERC on the repudiation of the power purchase agreement with DPC and the subsequent suits filed in the Bombay High Court and the Supreme Court on MERC's jurisdiction to adjudicate disputes between MSEB and DPC.
Courtesy: Financial Express: 16.5.05