PTC INDIA LIMITED Vs. JAIPRAKASH POWER VENTURES LTD

JUDGEMENT

(1.) In this petition under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act') PTC India Limited, the Petitioner, has challenged the impugned majority Award dated 28th April 2011 in the disputes between it and the Respondent Jaiprakash Power Ventures Limited (JPVL) [the successor-in-interest of Jaypee Karcham Hydro Corporation Limited ('Jaypee Karcham')] arising out of a Power Purchase Agreement ('PPA') dated 21st March 2006 executed between them for sale and purchase of power from the Jaypee Karcham Wangtoo Hydroelectric Project ('the project') being implemented by the Respondent in Kinnaur in Himachal Pradesh.

(2.) Jaypee Karcham, the predecessor-in-interest of JPVL, a generating company within the meaning of Section 2 (28) of the Electricity Act, 2003 ('EA') was incorporated on 29 th April 2002 for implementing the project comprising of four units of 250 MW each. On 31 st March 2003, the Central Electricity Authority ('CEA') under Section 4(b) of the Electricity Supply Act, 1948 ('ESA') granted Techno-Economic Clearance (TEC) to the project at an estimated capital cost of US Dollar ('USD') 117.44 million (Rs.5345.88 crores @ 1 USD = Rs.48). One of the conditions of the TEC was in Clause (xviii) which stated that the "tariff shall be decided by the Central Electricity Regulatory Commission ('CERC')". Under Clause 9 of the TEC in the event that the time gap between the TEC by the CEA and the actual start of work of the project was more than three years, a fresh TEC of the CEA had to be obtained before actual start of work.

(3.) Under the PPA entered into between the parties, Jaypee Karcham was to sell and the Petitioner was to purchase 704 MW gross capacity and corresponding energy from the project at the Project Bus Bar for a period of 35 years from the Commercial Operation Date ('COD') of the project for onward sale on a long term basis. The Petitioner is a trading licencee which meant that it is engaged in the trading of electricity by purchasing all forms of electric power from independent producers, captive power plants and other generating companies for sale to electricity boards, power utilities, transmission companies and other organisations buying power whether in the private or the public sector. In terms of the recital 'E' of PPA, the Petitioner was to enter into suitable arrangements with one or more purchasers for sale of the contracted power from the project. A condition precedent was set out in Article 3.1.3 (iv) of the PPA in terms of which the Petitioner was to execute a Power Sale Agreement ('PSA') with the purchaser approved by the appropriate Commission for the entire contracted power and make it available to Jaypee Karcham. Under Article 9.1.2 the determination of tariff was subject to approval of the appropriate Commission subject to Article 9.1.1. Under Article 9.1.3 the tariff approved by the appropriate Commission would be applicable for purchase and sale of the contracted power and contracted energy.