Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

Dispute Resolution Mechanism in India’s Renewable Energy Sector

Mihika Bhatnagar*
Abstract
There has been a tectonic shift in the energy sector of India from relying majorly on
unconventional sources of energy like coal and oil to increased investment in the renewable
form of energy and its major goal is by 2030, around half of India’s energy security to rely
solely on renewable energy, all due to United Nation’ 2030 Agenda of sustainable
development [“UN’ 2030 agenda”] and the increasing pressure on the world’s energy
security due to the Russia- Ukraine war.
Thus, there has been huge investment in Solar and Wind Photovoltaic [“PV”] as a result
there have been various new technologies, private players, and Special Purpose Vehicle
[“SPV”] entering into all forms of contract at every stage of the development procedure in
the greenfield advancement, and thus the number of disputes arising in the sector are more
than ever. In September 2019, the Ministry of New and Renewable Energy [“MNRE”]
released a blueprint for setting up of a Dispute Resolution Committee [“DRC “] to settle any
unforeseeable disputes that may arise at any stage of the production to distribution of
renewable energy in the country.
In this paper, I have summarized how India became the center of foreign investment in the
energy sector, why is arbitration the best way to settle disputes arising in the renewable
energy sector, the current guidelines set by MNRE on the same, and how far are they at pace
with the current international guidelines.
Keywords: Renewable energy, MNRE, Arbitration, DRC.

*
5th Year, School of Law, UPES Dehraduns

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

Introduction
India has always had a diverse energy supply involving coal, oil, gas solar, wind, etc., but the
major power suppliers in the Indian energy market has always been coal and oil, making the
fossil fuel industry comprise over 70% of the total energy supply in the country. 1 In the past
few years, the level of global warming and climate change worldwide has increased at an
alarming rate, and the average rate of increase in temperature has been twice as fast as 0.32
°F per decade since 1981.2
The Paris Convention of 2015, the United Nations Framework Convention on Climate
Change [“UNFCCC”] came into force in 1944 to eradicate and stabilize the impacts of
greenhouse gases [“GHGs”] and carbon dioxides [“CO₂”] in the environment along with the
Kyoto Protocol with basically operationalizes UNFCCC. 3 In 2012, the Doha Agreement was
further implemented for the second commitment period in the Kyoto Protocol. The global
sustainable development goals [“SDGs”] adopted in 2015 through the UNs’ 2030 agenda
clearly lays down the need for increasing the reliability of the renewable sector as a form of
energy in its goal number 6,7,12, and 13. 4 The European Union [“EU”] has also incorporated
European Green Deal to combat climate change by planning on making the EU to have net
zero emissions of GHGs, making it carbon-free by 2050. 5 The Intergovernmental Panel on
Climate Change [“IPCC”] has further elaborated on the need of relying on renewable sources
of energy.6 Along with that, India is also party to Bilateral Investment Treaties which words
in adherence with the other agreements.
Another important reason for the sudden shift towards the reliability of the renewable energy
sector is the Russia-Ukrainian war which has shattered the whole energy market in the world.
The war has accelerated the process of the energy transition by giving it a more economical
reason for the urgent shift in the global energy market due to the sudden increase in the oil
and gas prices due to the 2022 invasion.7 Since Russia is a top supplier of energy in the
world, shift to a conventional source of energy suddenly and increased investment in the area
1
International Trade Administration,
https://www.trade.gov/country-commercial-guides/indiaenergy#:~:text=The%20Indian%20power%20sector
%20uses,large%20and%20small%20hydro%20plants., Accessed on June 26th , 2023 [10:30].
2
Climate.gov, https://www.climate.gov/news-features/understanding-climate/climate-change-global-
temperature#:~:text=According%20to%20NOAA's%202021%20Annual,0.18%20%C2%B0C)%20per
%20decade., Accessed on June 26th, 2023 [11:11].
3
United Nations Climate Change, https://unfccc.int/kyoto_protocol, Assessed on June 26 th, 2023 [11:35].
4
UNDP, https://www.undp.org/sustainable-development-goals?gclid=Cj0KCQjwy9-
kBhCHARIsAHpBjHgV8q4IZ0mX_Bckom-
gXIZSEZVqcMRx1kWH6myv7_pk3VZfrBbvcp8aAgllEALw_wcB, Assessed on June 26th, 2023 [11:56].
5
A European Green Deal, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-
green-deal_en, , Assessed on June 26th , 2023 [12:03].
6
IPCC, https://www.ipcc.ch/report/renewable-energy-sources-and-climate-change-mitigation/, , Assessed on
June 26th , 2023 [12:33].
7
Jeff Tollefson, What the war in Ukraine means for energy, climate and food, Nature, (Assessed on June 26th,
2023, 13:52), https://www.nature.com/articles/d41586-022-00969-9.

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

is the only useful way to provide a balance in the world economy and increased energy need
globally and as a result, almost all the states are enormously investing in the renewable
sector.
The New Economic Policy in India was introduced in 1991 which brought with it three main
concepts: Liberalisation, Privatisation, and Globalisation [“LPG”]. 8 Ever since the concept of
LPG has emerged in the country, India has become a center of foreign investment, with
private players entering the field, the emergence of new technologies, placing India at a
global stand. India was facing coal shortages in the country in 2021 which led to a high
increase in the price of power exchanges9 which made India realize that coal is not a reliable
source of energy due to its uneven distribution and it was high time to shift towards a more
reliable source of energy.10
At the 26th session of the Conference of the Parties [“COP26”], India presented a Panchamrit
target to combat climate change in the country. India targets 500GW of wholly renewable
supplied energy capacity by 2030, thus, 50% of the energy security in India to be supplied
wholly through wind, solar, biomass, and other forms of renewable energy. India also aims
reduction in carbon emissions by one billion tonnes by 2030, reduction in carbon intensity by
45%, and reach the target of net zero carbon emission by 2070.11
This target can only be achieved through the increase in reliability towards the renewable
energy sector. Currently, India stands at fourth rank globally in the Renewable Energy
Installed Capacity.12 Ever since India has announced its target in the COP- 26, the reliability
of renewable sources needed to increase so a large number of tenders were invited in the area
and both Public Sector Undertakings [“PSUs”] like Solar Energy Corporation of India
[“SECI”], National Thermal Power Corporation [“NTPC”], National Hydro Electric Power
Corporation Private Limited [“NHPC”], Satluj Jal Vidyut Nigam Ltd. [“SJVN”] or any PSU
designated by MNRE and the private players like Tata Power Solar Systems Ltd., Adani
Power, Jindal Power etc., and tenders were awarded to them.
The renewable energy hubs in India comprise majorly coastal states like Gujrat, Rajasthan,
Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh. 13 Ever since the LPG schemes in
the country, it has become an attractive place for investment looking at the investor’s
perspective. The amount of investment in renewable energy in India reached US$ 14.5 billion

8
Sambit Rath, All about liberalization, privatization, and globalization, iPleaders, Assessed on June 26 th, 2023
[18:55], https://blog.ipleaders.in/all-about-liberalization-privatization-and-globalization/.
9
The Economic Times, https://economictimes.indiatimes.com/industry/renewables/view-private-sector-driving-
renewable-energy-wave-in-india/articleshow/90724802.cms?from=mdr, Assessed on June 27 th, 2023 [10:10].
10
Balcerzak, F. (2023). "Chapter 1 Introduction". In Renewable Energy Arbitration – Quo Vadis?. Leiden, The
Netherlands: Brill | Nijhoff. doi: https://doi.org/10.1163/9789004509344_002.
11
MNRE, https://pib.gov.in/PressReleasePage.aspx?PRID=1795071#:~:text=Reach%20500GWNon%2Dfossil
%20energy%20capacity,by%202030%2C%20over%202005%20levels., Assessed on June 26th , 2023 [12:47].
12
Press Information Bureau, https://pib.gov.in/PressReleseDetail.aspx?PRID=1885147, Assessed on June 27 th,
2023 [09:38].
13
India Brand Equity Foundation, https://www.ibef.org/industry/renewable-energy/showcase, Assessed on June
27th, 2023 [10:27].

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

in 2022 which was record-breaking. 14 With this advancement in the energy sector of the
country, there comes an increase in the number of disputes within the renewable energy
sector.
Disputes Arising from the Energy Transition
The sudden shift in the energy market due to the fossil fuel phase out has resulted in
numerous new Greenfield investments and thus there has been an integration of renewable
energy in the existing projects. As per reports, the number of disputes in the energy sector
will continue to increase in the next five years. 15 Just like conventional source of energy,
renewable projects too are long term, capital intensive, and complicated ventures. 16 There is
an involvement of multiple parties in the sector at multiple locations, and disputes may arise
at any stage at any level in the process of power generation from the green sector.
SPV enters into various separate contract from start to end with various stakeholders in order
to obtain permits, licences, and subsidies to develop, operate, and decommission the task of
production to supply of energy. Legal relationships are involved at every single level as
national regulators, administrative parties, contractors and transportation units are involved in
order to obtain the required permissions and carry on the procedure established by law.
Additionally various international investors, financial institutions, construction, and
engineering companies are involved and play a major role in their field. 17 Environmental
legal framework in the country also plays a pivotal role in categorising disputes occurring in
the sector.
The most prominent kinds of disputes which may arise during development and supply phase
is the delay during the construction phase, resulting in delay in delivering power and one of
the reasons for this delay is the procedure to obtain the required permits. There is a huge
pressure upon the energy producing industries to come up with new planning, technologies,
Joint Ventures [“JV”], and grid frequency. One of the disputes lies with the inherent risks of
testing new technologies, and thus, with new technology, comes the risk of Intellectual
Property Rights [“IPR”] related issues as new technologies and machines will come into
picture, which needs to be protected from being copied by other companies. IPR disputes
might arise on patented technologies, design related specifications, software, trademarks
etc.18

14
India Brand Equity Foundation, https://www.ibef.org/industry/renewable-energy#:~:text=Solar%20Parks
%20in%20Pavagada%20(2,is%20under%20installation%20in%20Gujarat., Assessed on June 27th, 2023 [11:05].
15
Clea Bigelow-Nuttall and Mark Harris, Disputes arising from the energy transition will be many and varied,
Pinsent Mason, (Assessed on June 27 th, 2023, 17:13),
https://www.pinsentmasons.com/out-law/analysis/disputes-energy-transition-many-varied.
16
Marily Paralika, Arbitration: An answer to disputes in the renewable energy sector?, Fieldfisher, (Assessed on
June 27th, 2023, 17:20), https://www.fieldfisher.com/en/insights/arbitration-an-answer-to-disputes-in-the-
renewable.
17
Marily Paralika, Design and build: Tackling energy construction disputes efficiently, ?, Fieldfisher, (Assessed
on June 27th, 2023, 17:53), https://www.fieldfisher.com/en/insights/design-and-build-tackling-energy-
construction-disp.
18
WIPO, https://www.wipo.int/amc/en/center/specific-sectors/energy/, Assessed on June 28 th, 2023, [14:16].

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

Connectivity to the national grid for the power plants causes a ton loads disputes in the
energy sector, and at almost all the phases including construction and operation phases,
obtaining necessary permits causes great difficulty in the smooth operation of the power
plant.19 Further, these kinds of projects are exposed to high profile scrutiny and thus, there is
a high involvement of political parties, meaning investor interest is not always prioritized.
The changing legal environment means an increased operational cost and the renewable
industry is often unpredictable and most of the times, the amount of energy generated is
determined by the kind of weather, geographical events, and environmental conditions. The
examples of such events would be unexpected ground conditions, material shortages, which
moistly happens in the offshore wind projects. Sometimes, bad weather would result in delay
in production of electricity and therefore there is a delay in the supply of electricity which in
turn, causes disputes especially since the issue of global warming, the change in environment
is extremely unpredictable and powerful. Further, there are various international investment
disputes which are occurring since past decade.
Additionally there are various investor-state disputes about the withdrawal or curtailment of
subsidies, and the national schemes related to the new arena is often found to be more
favourable to the international investors.20 Since energy generation projects are long term
projects, there is a huge competition within the energy market, which gives birth to various
additional disputes. Due to its long term nature, there might be chance for the change in the
government, meaning new schemes, and new contracts with new governmental agencies. 21
Other than that, disputes might also arise from safety implications, project’s host jurisdiction,
and technical complexities. Ever since the Russia- Ukraine war, the prices of energy has been
fluctuating, and the renewable sector demands huge investment, and sometimes, the amount
of investment might not match the results which is another cause for disputes. Various major
countries like US, China, EU etc. are investing vigorously in the renewable sector 22, and India
has also steeped to keep up with the pace.
Arbitration as a Mechanism for Dispute Resolution in the Renewable Energy Sector
Due to frequent and repetitive disputes arising in the renewable energy sector, the number of
cases arising in the area is many, leaving the parties to choose from various available options
at hand like litigation, arbitration, investment treaty arbitration, and expert determination. 23
Various factors like the nature of parties involved, the complexity of the project, stage of the
19
Aceris Law LLC, https://www.acerislaw.com/renewable-energy-arbitration/, Assessed on June 28 th, 2023,
[14:47].
20
Cameron, Peter D. "5 RENEWABLE ENERGY DISPUTES". Delivering Energy Law and Policy in the EU
and the US: A Reader, Edinburgh: Edinburgh University Press, 2016, pp. 23-28.
https://doi.org/10.1515/9780748696802-009.
21
Tariq Khan, The Growing Need for Arbitration in Energy Disputes, 2023 SCC OnLine Blog Exp 3, (Assessed
on June 28th, 2023, 15:33), https://www.scconline.com/blog/post/2023/01/14/the-growing-need-for-arbitration-
in-energy-disputes/.
22
Hajdukiewicz, A.; Pera, B. International Trade Disputes over Renewable Energy—the Case of the Solar
Photovoltaic Sector. Energies 2020, 13, 500. https://doi.org/10.3390/en13020500.
23
LexisNexis, https://www.lexisnexis.co.uk/legal/news/resolving-disputes-on-renewable-energy-projects-what-
tools-are-available-how-do-you-choose, Assessed on June 28th, 2023, [16:29].

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

project, its location, and confidentiality considerations. 24 India is predicted to lead the
renewable energy market and a large number of solar and wind PV are expected to grow and
this installed PV would soon surpass coal and natural gas by 2024. 25 This has called for a
need to involve and refer most of the cases arising due to the energy sector in the hands of
arbitral proceedings.
Arbitration in itself is the most suited process for obtaining relief in renewable energy
disputes due to the involvement of a third party for an unbiased ruling which is favorable to
both sides, it is relatively faster than litigation, reliable, and somehow cost-effective. The
most attractive feature of arbitration is the protection of goodwill and reputation of the parties
due to its confidential nature. Most of the cases indulged here are high profile and are prone
to attract media attention, political agendas, and NGO involvement, in case of environmental
issues. Most of the parties to the dispute are usually from different jurisdictions and
arbitration as a mode of dispute resolution allows the party to decide among themselves, a
place for arbitration, convenient to both parties, thus allowing them to choose a seat for
arbitration and that place can be both in India as well as outside India.26
Arbitration is considered as a simpler process if we compare it with the traditional method of
litigation because it allows the parties to decide what laws will be applicable to them. Further,
the Arbitral Awards passed are final and binding on the parties, and are irreversible. 27 It is a
known fact today that the Indian courts are overburdened with new cases coming up every
day and the older cases take years to reach to a result. 28
The energy field is a complicated field and it requires integrated, specialized knowledge of
technologies, techniques, and legal framework, and only a few judges in India are able to
provide that. However, arbitration allows the parties to choose an expert as their arbitrator
thus, providing valuable knowledge and an informed decision to provide the Arbitral Award
which is ultimately favorable to both parties. Arbitration allows the industry, businesses,
regulators, and consumers to take more control.
The government of India in 2021, since the dawn of Covid-19 has allowed online filing and
hearing of cases, the concept of Online Dispute Resolution [“ODR”] and the National
Institution for Transforming India [“NITI Aayog”] also constituted a committee for
mainstreaming of ODR in India.29 This is further beneficial for the parties seeking relief at the
comfort of their homes. It is not wrong to say that the future of renewables lies in arbitration
itself.30

24
Freshfields Bruckhaus Deringer, https://sustainability.freshfields.com/post/102hn4t/resolving-disputes-on-
renewable-energy-projects-what-tools-are-available-and-ho, Assessed on June 28 th, 2023, [17:42].
25
IEA, https://www.iea.org/reports/renewables-2020?mode=overview, Assessed on June 28 th, 2023, [16:40].
26
Clyde and Co., https://www.clydeco.com/en/insights/2021/10/dispute-resolution-power-renewable-energy,
Assessed on June 28th, 2023, [17:23].
27
Arbitration and Conciliation Act, 1996, S 35, No. 26, Acts of Parliament, 1949 (India).
28
Devina Poonia, Nature of the disputes that can be solved through arbitration, iPleaders, (Assessed on June
29th, 2023, 13:37), https://blog.ipleaders.in/nature-disputes-can-solved-arbitration/.
29
Press Information Bureau, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1777674, Assessed on June
29th, 2023, [13:49].

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

International Arbitral Awards or Foreign Awards are also enforceable in India same as a
court order.31 India is a party to New York Convention and Geneva Convention, so any
Arbitral Award passed in any of the member countries of the said conventions is also
enforceable in India.

Current Guidelines Regarding Arbitration of Renewable Sector Disputes in India

India imports most of its energy supplies from naturally enriched countries like Russia, and
thus, disputes occur both domestically and internationally. The Draft National Energy Policy,
2017 has aimed towards universal electrification and thus, a number of private players were
included in the energy market of India, thanks to the policy. 32 In India, the Central
Government exercises control over the Natural resources of the country as per Article 297 of
the Constitution33.
The Jawaharlal Nehru National Solar Mission [“National Solar Mission”] was launched in
2010 in three phases34, further, in the year 2015, India along with France launched the
National Solar Alliance at the COP21 where International Solar Alliance aimed to reduce the
cost of production of solar energy. 35 In India, the electricity sector is governed under the
Electricity Act, 2003, and the Act clearly provides for the referral of disputes to Arbitration. 36
The Supreme Court, in the case of Gujarat Urja Vikas Nigam v. Essar Power Ltd.37, clarified
the jurisdiction of the Electricity Act, 2003 and the Arbitration and Conciliation Act, 1996
[“Arbitration Act, 1996”], as to who will override who. It was held that except for Section 11
of the Arbitration Act, 199638, all other provisions will be applicable to Section 86(1)(f) of the
Electricity Act, 2003. The Ministry of Power has also released the Draft Electricity (Rights of
Consumers) Amendment Rules, 2023, which has proposed multiple Distribution Companies
[“DISCOMs”] in the same area of supply.
India has its Ministry of New and Renewable Energy to take care of the renewable energy
sector and reduce India’s reliance on fossil fuels. 39 Further, the Indian Renewable Energy
Development Agency [“IREDA”] regulates the financing along with the promotion of
friendly competition within the energy sector.40 The government of India has also established
30
Ioana Knoll-Tudor, 2023 PAW Recap – Day 3: Arbitrating Renewable Energy Disputes in the CEE Region,
Kluwer Arbitration Blog, Assessed on June 29th, 2023 (14:31)
31
Arbitration and Conciliation Act, 1996, S 49, No. 26, Acts of Parliament, 1949 (India).
32
Niti Aayog, https://www.niti.gov.in/sites/default/files/2022-12/NEP-ID_27.06.2017.pdf.pdf, Assessed on June
29th, 2023 (17:07).
33
INDIA CONST. art. 297
34
IEA, https://www.iea.org/policies/4916-jawaharlal-nehru-national-solar-mission-phase-i-ii-and-iii, Assessed
on June 29th, 2023 (17:15).
35
MNRE, https://mnre.gov.in/isa/#:~:text=Established%20by%20Prime%20Minister%20Narendra,and
%20development%2C%20and%20capacity%20building., Assessed on June 29th, 2023 (17:19).
36
The Electricity Act, 2003, S 86(1)(f), No. 36, Acts of Parliament, 1949 (India).
37
(2008) 4 SCC 755
38
Arbitration and Conciliation Act, 1996, S 11, No. 26, Acts of Parliament, 1949 (India).
39
MNRE, https://mnre.gov.in/the-ministry/what-does-the-ministry-do/#:~:text=The%20Ministry%20of%20New
%20and,energy%20requirements%20of%20the%20country., Assessed on July 1st, 2023 (10:00).
40
IREDA, https://www.ireda.in/ireda-functions-and-duties, Assessed on July 1st, 2023 (10:07).

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

SECI which aims to build ‘Green India’ and promote the development of solar power plants
in the country.41
The aim which India has set in the COP26 asks for around 533 billion $ worth of investment
solely for the renewable power sector.42 Renewable power in India is governed through the
Energy Conservation Act, 2001, which provides for the efficient use of energy. It provides
for the establishment of Bureau of Energy Efficiency [“BEE”]. 43 After COP26, the
government of India passed the Energy Conservation (Amendment) Act, 2022, in order to
further facilitate India in achieving Panchamrit and the development of the carbon market of
the country.44 The Government of India, in 2022, announced the Green Hydrogen Policy to
further show its commitment of combatting climate change. 45 The Arbitration and
Conciliation (Amendment) Act, 2015, introduced the fast-track arbitration proceedings and
provided that Arbitral Award needs to be passed within twelve months from the initiation of
Arbitral proceedings.46 This made arbitration even more popular as a method for dispute
resolution in almost all sectors.
Most of the disputes occurring in the renewable sector will be resolved through Investment
Arbitration which aims to resolve the disputes occurring between foreign investors and the
host states.47 This means that Bilateral Investment Treaties [“BIT’s”]), Free Trade
Agreements [“FTA’s”] and multilateral agreements, like, The Energy Charter Treaty [“ECT”]
will be applicable here. 48
ECT came into force in 1998, and provides for the regulation of Dispute Resolution in Part V
of the treaty. 49 ECT provides for the settlement of disputes between investors and contracting
parties50, and the settlement of disputes between the contracting parties. 51 Afghanistan and

41
SECI, https://www.seci.co.in/about/vision-and-mission, Assessed on July 1st, 2023 (10:10).
42
Kowtham Raj VS and Satwik Mishra, Covid-19: Will arbitration help India navigate legal wildfire expected in
energy sector?, Live Mint, (Assessed on July 1st, 2023, 10:17), https://www.livemint.com/industry/energy/covid-
19-will-arbitration-help-india-navigate-legal-wildfire-expected-in-energy-sector/amp-11587364501945.html.
43
Energy Conservation Act, 2001, S 3, No. 52, Acts of Parliament, 1949 (India).
44
Surabhi Khattar, Ashutosh Singh, and CAM Disputes Team, The Energy Conservation (Amendment) Act,
2022: Key Highlights, Cyril Amarchand Mangaldas Blogs, (Assessed on July 1 st, 2023, 10:33),
https://corporate.cyrilamarchandblogs.com/2023/01/the-energy-conservation-amendment-act-2022-key-
highlights/#:~:text=The%20Amendment%20Act%20introduces%20new,be%20notified%20in%20the
%20future.
45
Ministry of Power, https://powermin.gov.in/sites/default/files/Green_Hydrogen_Policy.pdf, Assessed on July
1st, 2023 (11:03).
46
Arbitration and Conciliation (Amendment) Act, 2015, S 29B, No. 3, Acts of Parliament, 1949 (India).
47
International Arbitration Information by Aceris Law LLC, https://www.international-arbitration-
attorney.com/investment-arbitration/, Assessed on July 1st, 2023 (10:44).
48
Yazad Udwadia and Abeer Tiwari, india’s Tryst with Energy Investment Arbitration and the Contemporary
World, Indian Journal of Projects, Infrastructure and Energy Law, (Assessed on July 1 st, 2023, 10:50),
https://ijpiel.com/index.php/2022/04/04/indias-tryst-with-energy-investment-arbitration-and-the-contemporary-
world/.
49
Kaj Hobér, Investment Arbitration and the Energy Charter Treaty, Journal of International Dispute Settlement,
Volume 1, Issue 1, February 2010, Pages 153–190, https://doi.org/10.1093/jnlids/idp003.
50
ECT, Art 26.
51
ECT, Art 27.

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

Turkmenistan are registered members of ECT, meaning Turkmenistan- Afghanistan-

Pakistan-India [“TAPI”] pipeline is being registered as an ECT contracting party entity. 52
On 20th September, 2019, MNRE issued an order for a Dispute Resolution Mechanism
[“DRM”] for the resolution of unforeseeable disputes between wind and solar developers and
SECI and NTPC, wherein MNRE proposed setting up of DRC. In the order, MNRE also
proposed the blueprint of DRC, and stated that DRC will be a three-member committee that
will be appointed with the due permission of MNRE, and after the application is brought
before it, the DRC shall hold hearings on the subject and submit its recommendations to
MNRE not later than 21 days of such reference.53
However, only after two months after MNRE released the blueprint, it released an amended
version of the guidelines for DRC. It proposed to set up DRC which expands its scope to
resolve the issues arising both out of contractual and non-contractual agreements. 54 The
committee was formed to majorly deal with the cases related to time extensions and other
common issues which arise during the normal day-to-day functioning of the power plants.
In 2020, the MNRE released a set of clarifications for its DRM, the MNRE through this order
clarified that if the number of days of time extension allowed by the government is less than
the number of days of time extension claimed by the solar or wind developer, then the refund
will be in proportion to the number of days allowed as per the total number of days claimed
by the developer. Before this, MNRE stated that the fee payable would be 5% of the
performance bank guarantee in case of an extension of time dispute. A minimum fee of
$1,406.72 would be payable even if 5% of the guarantee was less than $1,406. Later on, the
MNRE clarified that the amount could, in no case, exceed $140,672.55
On 3rd March, 2022, MNRE issued the procedural guidelines for DRC upon unforeseeable
disputes. On 7th June, 2023, wherein MNRE revised the guidelines for setting up DRC, and it
clearly stated that the revised guidelines would supersede all the previous orders regarding
DRC. DRC is set up for resolving the unforeseen disputes that may arise in the
implementation of contractual agreements and also for dealing with issues that are beyond the
scope of Contractual Agreements between Renewable Energy Power Developers/ EPC
Contractors and SECI/ NTPC/NHPC/ SJVN/ any other Renewable Energy Implementing
Agency [“REIA”], which will be designated by MNRE.56

52
Jamal, Fazil, Energy Charter Treaty: A View from India (October 20, 2020). International Journal of Law,
Management and Humanities, Volume 5, Issue 4 (2022), Pages: 1616 - 1630. DOI:
https://doij.org/10.10000/IJLMH.113503, Available at SSRN: https://ssrn.com/abstract=4195188.
53
MNRE, https://mnre.gov.in/img/documents/uploads/7dc32f804c2f4d1aaac36687aea8bc19.pdf, Assessed on
July 1st, 2023 (13:51).
54
Anjana Parikh, MNRE Amends Guidelines for Dispute Resolution Mechanism for Wind and Solar
Developers, Mercom, (Assessed on July 1st, 2023, 14:02), https://www.mercomindia.com/mnre-amends-
guidelines-wind-solar-developers.
55
Rakesh Ranjan, MNRE’s Clarifications on the Dispute Resolution Mechanism for Solar and Wind
Developers, Mercom, (Assessed on July 1st, 2023, 14:29), https://www.mercomindia.com/mnre-clarifications-
dispute-resolution-mechanism.
56
MNRE, https://mnre.gov.in/img/documents/uploads/file_f-1686128097720.pdf, Assessed on July 1 st, 2023
(15:20).

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Indian Journal of Projects, Infrastructure and Energy Law Issue 3 Volume I

As per the new order, In case of all disputes, whether covered by Power Purchase Agreement
[“PPA”] / EPC Contract/ Agreement or not, the application should be first made to REIA,
and the REIA will pass a speaking order on the same. REIA would be bound to give its
decision within 21 days of receiving the application. The order further said that all the
meetings of the DRC would be held on the premises of MNRE, while the transportation of
DRC members would be taken care of by SECI. 57

Conclusion
The renewable energy sector has been growing at a hectic pace, and the whole sector is
developing every day, which means new ideas and innovations are coming up every single
day. There has been a huge pressure on India to keep up with other developed countries and
deliver the projected renewable energy in the stipulated time period.
There have been a number of emerging cases in the renewable energy sector and these
disputes must be resolved fast and in an effective manner which is the only way, the target
which India has set at the COP 26 could be achieved. However, there is somehow an excess
of delegation of power when we look at the current guidelines formulated by MNRE. The
current procedure suggested by MNRE, which sought to establish DRC in order to save time
of the court, complicates things more, which will be even more time-consuming. The final
decision of DRM must be used to gain investors’ confidence, and with excessive delegation,
the whole point of confidentiality and protection of goodwill of the parties will be defeated,
which is the backbone of Arbitration.
Further, ever since, the TAPI consortium became a part of ECT, it has become important for
India and has always been to comply with the international guidelines set by various BIT,
unilateral, and multilateral treaties. However, the current scenario of MNRE orders are not up
to mark as it poses a lot of burden on the parties to understand when to consult whom
whereas the international guidelines are simple and proper authority is given.
Alongside, the kinds of disputes specified in the DRC blueprint, only expand to the normal
day-to-day disputes, and in cases of any severe dispute, the parties would ultimately revert to
litigation, which again, defeats the whole purpose of having a separate committee set up for
promoting arbitration as a method of dispute resolution in the renewable energy sector.

57
Supra Note

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