MSEB Moves SC To Dismiss DPC Plea On HC Order

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Mumbai, Sept 13: The ongoing Dabhol controversy has taken a new twist as Maharashtra State Electricity Board (MSEB) has appealed to the Supreme Court (SC) to summarily dismiss the Dabhol Power Company’s (DPC) petition challenging the Bombay high court’s order that Maharashtra Electricity Regulatory Commission (MERC) has jurisdiction to adjudicate dispute between MSEB and DPC. The SC is scheduled to hear the matter in this regard on September 14.

MSEB has pleaded that GE and Bechtel, which acquired on April 8 the 65.8% stake held by Enron Corp and associates in DPC, have in international tribunals sought to discredit the Indian judiciary. GE and Bechtel have breached orders passed by Indian courts to insulate their claims against MSEB regardless of the outcome of the present MSEB’s appeal.

“In breach of the orders passed by the apex court as well as the Bombay high court, GE and Bechtel, through their subsidiaries — Capital India Power Mauritius (CIPM) and Energy Enterprises (Mauritius) Company (EEMC) and through DPC — have initiated steps and are actively pursuing various arbitrations overseas against MSEB, Maharashtra Power Development Corporation Ltd (MPDCL) and the Maharashtra government.

They are also pursuing arbitrations against the Government of India (GoI). The financial structure and obligations in relation to the Dabhol project are such that in the event of any arbitral award being made against any party other than MSEB, since MSEB was the party to the power purchase agreement (PPA), generally, the eventual financial liability would devolve on MSEB,” MSEB argued.

According to MSEB, GE and Bechtel and DPC are adopting a strategy whereby they would be able to recover millions of dollars from MSEB without an adjudication of the core dispute by the competent forum. If MSEB is correct and it is held that DPC was guilty of material misrepresentation and that the recision of PPA was lawful, all subsequent actions of MSEB, MPDCL, GoI and Maharashtra government consistent with this position would be found to be justified. Claims by GE, Bechtel and DPC, in various arbitrations, are premised on the position that MSEB’s actions, in respect of the recision, were unjustified.