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SC asks HC to decide MERC jurisdiction in Enron case
In a new twist to the high-voltage Rs 5 billion dispute over Power Purchase Agreement between Enron-promoted Dabhol Power Company (DPC) and the Maharashtra State Electricity Board (MSEB), the Supreme Court on Monday stayed the arbitration proceedings initiated by the multinational.
In a new twist to the high-voltage Rs 5 billion dispute over Power Purchase Agreement between Enron-promoted Dabhol Power Company (DPC) and the Maharashtra State Electricity Board (MSEB), the Supreme Court on Monday stayed the arbitration proceedings initiated by the multinational.
The apex court asked the Bombay High Court to decide whether Maharashtra Electricity Regulatory Commission (MERC) had the jurisdiction to adjudicate the dispute.
A bench comprising Justice S P Bharucha and Justice Y K Sabharwal allowed the petition filed by DPC challenging the June 26 order of the High Court holding that the Commission, being an expert body, had jurisidiction to hear the dispute.
However, the bench said "until such time the High Court finally hears and decides the writ petition filed by DPC challenging the jurisidiction of MERC, the Commission will not pass further orders on the application that has been made before it by the Maharashtra State ELectricity Board (MSEB). "Equally during that time, arbitration proceedings commenced by DPC will not be proceeded with," the Bench said adding "Till the High Court decides the writ petition, the interim orders passed by the Commission will continue."
The MERC by its June 29 interim order had restrained DPC from resorting to international arbitration and invoking of escrow account from the banks. While DPC, a company formed by Enron, General Electric, Bechtel Enterprises Inc and Mahrashtra Power Development Corporation with an investment of Rs 136.1 bn at present, had alleged that MSEB was not making punctual and full payment for electricity drawn by it, MSEB had alleged that DPC owed it over Rs 5 bn as rebates under the PPA.
Bureau Report
However, the bench said "until such time the High Court finally hears and decides the writ petition filed by DPC challenging the jurisidiction of MERC, the Commission will not pass further orders on the application that has been made before it by the Maharashtra State ELectricity Board (MSEB). "Equally during that time, arbitration proceedings commenced by DPC will not be proceeded with," the Bench said adding "Till the High Court decides the writ petition, the interim orders passed by the Commission will continue."
The MERC by its June 29 interim order had restrained DPC from resorting to international arbitration and invoking of escrow account from the banks. While DPC, a company formed by Enron, General Electric, Bechtel Enterprises Inc and Mahrashtra Power Development Corporation with an investment of Rs 136.1 bn at present, had alleged that MSEB was not making punctual and full payment for electricity drawn by it, MSEB had alleged that DPC owed it over Rs 5 bn as rebates under the PPA.
Bureau Report