Six offshore banks from Austria, France, Switzerland, the Netherlands and the United Kingdom on Friday served notices on the Centre for settlement of claims exceeding $200 million in relation to the troubled Dabhol Power Company.
The notices were served under the bilateral investment treaties between India and these countries.
The claims filed by the six banks are supported by other lenders, including the Overseas Private Investment Corporation of the United States and five international banks.
The banks had sought negotiations with the Centre to work out an amicable and comprehensive settlement of all claims filed by the offshore lenders to the project, failing which the dispute would be referred for international arbitration, a statement from law firm Dua Associates said on behalf of the steering committee of the offshore lenders.
"The claims are based on the fact that the Centre failed to comply with the obligations under the bilateral investment treaties to protect foreign investment in the Dabhol power project following its closure in 2001. If the claims are upheld, the Centre will be liable to pay compensation equal to the outstanding loans plus interest, default interest and expenses," the statement said.
It added that the claims were a result of the problems affecting the 2,144 Mw project, and reflected the lack of progress by the Indian government over the last two years in agreeing to a solution that recognised both the political nature of the problems as well as the rights of the offshore lenders.
The six banks include Erst Bank, ANZ ES Ltd, Credit Lyonnais, BNP Paribas, Credit Suisse First Boston and ABN Amro.
ABN Amro had filed for the maximum claim of $77 million, followed by CSFB ($35.3 million), ANZ ES ($35.2 million), BNP Paribas ($14.6 million) and Erst Bank ($9.7 million), a spokesperson for the law firm said.
Notices have been served on Prime Minister Atal Bihari Vajpayee, External Affairs Minister Yashwant Sinha, Finance Minister Jaswant Singh and Power Minister Ananth Geete.
