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UK tribunal adjourns hearing on DPC plea

June 23, 2003 15:01 IST

The Arbitral Tribunal at London has adjourned the proceedings on the case filed by the Dabhol Power Company, pertaining to the invocation of counter guarantee given by the Union government, official sources said in New Delhi on Monday.

The adjournment came in the wake of the Delhi high court order of June 18, restraining the DPC from going ahead with the arbitration proceedings till July 10.

The sources said that after the high court order, the counsel for DPC urged the tribunal to proceed with the arbitration on the basis of the records, which was opposed by the counsel for the Indian government.

After considering the issues raised in the correspondence between the parties, the Tribunal adjourned the hearing scheduled for Monday.

Meanwhile, the Attorney General Soli J Sorabjee has reached London to meet the English Solicitors and Queen's counsel for consultations and to consider the Tribunal's order and its implications vis-a-vis the high court order.

After examining the matter threadbare, he would consider the future course of action to be adopted by the Union government in the arbitration matter.

The government has informed the Tribunal that the DPC has already challenged before the Supreme Court the jurisdiction of Maharashtra Electricity Regulatory Commission to decide issues pertaining to the counter guarantee.

It had submitted that the Tribunal should await the decision of the Supreme Court in this regard.

On May five this year, DPC, promoted by the US major Enron, and Maharashtra State Electricity Board had agreed to freeze their disputes before MERC and foreign arbitrators to await the verdict of the Supreme Court on the jurisdiction issue.

A Bench comprising Justice Y K Sabharwal and Justice H K Sema had passed an order to this effect after both DPC and MSEB gave their consent in writing to passing of a common order to this effect.

The order was passed on a petition filed by DPC, challenging a Bombay high court order holding that MERC had exclusive jurisdiction to decide the disputes between DPC and MSEB over payment dues.

DPC had closed its operations in India nearly one-and-a-half years back due to the differences between MSEB and Enron over the price to be paid by the state board to the promoter on the purchase of power.

It was agreed by both the parties that till the apex court decided on the jurisdiction issue, the MERC would not pass any further orders on the application filed by MSEB.

However, all interim orders passed by the MERC would continue to operate, the agreement said.

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