The Ministry of New & Renewable Energy (MNRE) had issued an order on June 18, 2019 for 'setting up of a Dispute Resolution Mechanism to consider the unforeseen disputes between solar/wind power developers and Solar Energy Corporation of India (SECI)/NTPC Limited (NTPC), beyond contractual agreements (Order)1.

What are the key amendments introduced by the Amendment Orders?

The following are the key amendments introduced by the Amendment Orders:



Application Procedure

▪The Amendment Orders require an application to be submitted SECI/NTCP in case of all the disputes, whether or not covered by the power purchase agreements (PPAs).

▪To further the aim of setting up renewable projects, SECI/NTPC are required to pass speaking order to give a just solution to the developers.

▪The applicant would have the right to appeal to the dispute resolution committee (DRC) if it is not satisfied with the orders given by SECI/NTPC.

Disputes to be considered by the DRC

▪The DRC would consider all appeals against decisions made by the SECI/NTPC on disputes concerning the following: - all requests for extension of time (EOT) due to recognized force majeure events

- all requests for EOT not covered under the terms of the contract

- all disputes other than those pertaining to EOT between SECI/NTPC and developers

▪For each kind of dispute, the Amendment Orders specify the timelines within which the application and the appeal are to be made to the SECI/NTCP and the DRC respectively.

▪Further, an EOT would not be granted for overlapping periods of effect as a result of two or more causes (whether on account of Force Majeure Events or for items not covered under the contractual arrangements).

Fees Payable for making Applications

▪In case of EOT disputes, the fee payable is 5% of the impact of SECl/NTPC's decision being challenged, with the impact being limited to the Performance Bank Guarantee (PBG) submitted for the project concerned. Such fee would be a minimum of INR 1,00,000 and could go upto a maximum of INR 1,00,00,000.

▪In case of disputes other than EOT disputes with a PBG, the fees payable was the same as those for EOT disputes.

▪For disputes other than EOT disputes and without a PBG, the fees payable was 5% of the total impact of the dispute, which was to be a minimum of INR 1,00,000 and a maximum of INR 1,00,00,000.

▪Further, the fees are to be deposited into the appropriate payment security fund maintained by SECI/NTPC.

Our view: Considering the application process and the timelines which have been detailed out vide the Amendment Orders, one hopes for efficient and effective resolution of disputes concerning solar and wind power developers. Further, stipulation of a threshold of INR 1,00,00,000 for applications before the DRC pertaining to EOT disputes will eliminate ambiguity on the maximum fee leviable. This step by the MNRE of setting up a transparent, unbiased speedy dispute resolution mechanism, is significant in view of India's ambitious target of having 175 GW of renewable energy by 2022.


1 The Order and guidelines issued for its implementation have been covered in our Infrastructure and Energy Digests for June 2019 and September 2019 respectively.

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