In a major decision to facilitate the solar and wind energy projects, Union Minister of State for Power and New & Renewable Energy (IC) and Skill Development & Entrepreneurship, RK Singh, has approved the formation of a three member Dispute Resolution Committee to consider the unforeseen disputes between solar/wind power developers and PSUs Solar Energy Corporation of India Limited (SECI) and National Thermal Power Corporation (NTPC) beyond contractual agreement.
The Members of Dispute Resolution Committee under this mechanism will be MF Farooqui (former DOT Secretary/ Heavy Industry Secretary); Anil Swarup (former Coal Secretary); and AK Dubey (former Sports Secretary), as per a Press Information Bureau release .
In an earlier statement, emphasizing the importance of this step, Singh had said that the move would give further fillip to the smooth implementation of solar/wind energy projects in India. It fulfills a long pending demand of the industry to resolve expeditiously, unforeseen disputes that may arise beyond the scope of Contractual Agreements.
The Solar and Wind Industry have been demanding setting up of Dispute Resolution Mechanism by MNRE for quite some time, to resolve expeditiously, unforeseen disputes that may arise beyond the scope of Contractual Agreements between solar power developers / wind power developers and SECI/ NTPC.
The issue was considered and it was felt that there is need to erect a transparent, unbiased Dispute Resolution Mechanism, consisting of an independent, transparent and unbiased Dispute Resolution Committee (DRC), for resolving the unforeseen disputes that may arise in implementation of contractual agreements and also for dealing with issues which are beyond the scope of Contractual Agreements between solar power developers/ wind power developers and SECI / NTPC.
The mechanism of Dispute Resolution Committee (DRC) will be applicable for all solar/ wind Schemes/ Programmes/ Projects being implemented through/ by SECI/ NTPC.
The DRC will consider following kinds of cases:
(a) All cases of appeal against decisions given by SECI on Extension of Time requests based on terms of contract: All requests for extension of time due to recognized ‘Force Majeure’ events like flood, earthquake, delay in handing over of land by Solar Park Developers, delay in connectivity, etc. will be dealt strictly as per Contractual Agreements. In all such cases, the solar power developers / wind power developers shall make an application for grant of Extension of Time (EoT) within the time specified in the Contractual Agreement. If application is not made within the time limit prescribed in the Contractual Agreement, it shall be summarily rejected by SECI/ NTPC. If application is made within the time limit, the request will be examined and final decision given to solar power developer/ wind power developer within 21 days from the date of application. No separate extension of time shall be granted for overlapping periods of effect by two or more causes. If the developer is not satisfied with the decision of SECI/ NTPC, then it may appeal to the Dispute Resolution Committee (DRC), within 21 days of SECI/NTPC’s order after paying a fee, to be decided by the DRC, which in any case shall not be less than 5% of the impact of SECI’s/NTPC’s decision being challenged. This fee shall be deposited into the Payment Security Fund maintained by SECI/ NTPC for the project concerned. In case, the Government upholds the appeal in toto, after taking into consideration the recommendation of DRC, and strikes down the SECI order, then the fee so collected shall be refunded, provided the DRC makes a recommendation for the same and the Government passes a specific order to that effect. The Fee which may be received and is not required to be refunded, shall be credited to the appropriate Payment Security Fund being maintained by SECI/NTPC.
(b) All requests of Extension of Time not covered under the terms of contract: All cases involving unforeseen issues/ circumstances not covered under Contractual Agreements like cases where the site is to be procured by the developer but there is delay in land allotment due to policy change or registration by the Government, delays in grant of proposed connectivity due to court stays, etc., will be placed before the DRC for consideration and make recommendations to Ministry of New & Renewable Energy (MNRE) for appropriate decision.
The ‘Dispute Resolution Committee’ (DRC) will examine all such cases referred to it, including the cases where the developer is not satisfied with the decision of SECI/NTPC and it decides to appeal after paying the required fee as laid down under Para (ii) (a) above, in a time bound manner and submit its recommendations to the Ministry of New & Renewable Energy (MNRE), not later than 21 days from the date of reference.
The recommendations of the ‘Dispute Resolution Committee’ (DRC) along with MNRE’s observations, will be placed before Minister (NRE) for final decision. The Ministry shall examine and put up such recommendations to Minister (NRE) with the comments of IFD within 21 days of receipt of recommendation from the DRC.
To arrive at any decision, Committee will be free to interact with the relevant parties of the case and shall record their views. For presenting the case before the DRC, no lawyers shall be permitted.