The Supreme Court on Tuesday began hearing the appeal of Dabhol Power Company against the Bombay high court judgment ruling that the Maharashtra Electricity Regulatory Commission has the jurisdiction to decide on the legality of the revocation of the agreement between MSEB and DPC.

The Dabhol Company wants the dispute to be decided according to the arbitration clause in the agreement, and not by MERC.

The bench, headed by Justice Y K Sabharwal, has been trying to restart the $3 billion plant grounded since 2001, but since there appears to be little hope of an early settlement, it decided to hear the issues and give its judgment.

GE and Bechtel, foreign promoters, have maintained that Indian courts have no jurisdiction to decide the issues. They have also challenged the locus standi of the central government. They had slapped a Rs 26,000 crore (Rs 260 billion) arbitration notice on the MSEB last year.

When DPC sought arbitration in London, the central government obtained a stay order against it from the Delhi high court.