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July 2016

Corporate Amicus: June 2016

Article

Alternative Remedy for imported coal price escalation -

Under Power Purchase Agreements (PPAs) while quoting the capacity charge and the energy charge, bidders have to also indicate their escalable/ variable component and non-escalable /fixed component. The agreement also recognizes revision in the power tariff on account of reasons being attributable to a force majeure event or change in law. Recently escalations in the price of imported coal has resulted in the power generating companies seeking a revision of their tariff, claiming it to fall under the heads of force majeure and change in laws. The article in this issue of Amicus discusses a recent decision of the Appellate Tribunal for Electricity wherein the Tribunal has set aside CERC Orders granting compensatory tariff, and has redirected the appeals to the CERC to review them on the grounds of force majeure and award compensatory relief. According to the author, it remains to be seen how the CERC will quantify the compensation and whether the amount will be available to the power generating companies as an immediate relief or as a deferred relief.

 

Notifications & Circulars

  • Foreign Direct Investment (FDI) Policy – DIPP issues consolidated FDI Policy while government announces further liberalization.
  • National Company Law Tribunal constituted.
  • SEBI amends definition of ‘Willful Defaulter’ across a number of SEBI regulations to include the directors or promoters of company who are adjudged as willful defaulters or categorized as such by the RBI

 

Ratio Decidendi

  • Compliance with MPS norms - All promoters are equally responsible – SEBI
  • Non-payment of a disputed debt is not ‘neglect to pay’, dismissal of winding up petition – Gujarat High Court

 

May, 2016/Issue-57 June, 2016/Issue-58

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