J Sagar Associates has represented generating company Adani Power before the Supreme Court of India in a series of appeals filed by distribution companies in Haryana and Gujarat against an order made by the Appellate Tribunal for Electricity.
In this precedent-setting case the court held that a generating company may be entitled to ‘carrying cost’ by upholding the principle of restitution in case of Change in Law compensation.
The successful appeal is a boon for generating companies – and possibly all utility companies – who may recover delayed payments with carrying cost in terms of the power purchase agreements (PPAs) in order to be restored to their original economic position.
However, the court limited relief to PPAs with an express provision for ‘carrying cost’. Most Solar PPAs today do not have similar restitution clauses so it remains to be seen what will happen under PPAs without such express provision.
J Sagar Associates’ team was led by joint managing partner Amit Kapur and partner Poonam Verma.