The Ministry of New & Renewable Energy (MNRE) in India has established a new dispute resolution mechanism to address unforeseen disputes between renewable energy power developers, engineering, procurement, and construction (EPC) contractors, and implementing agencies. The revised mechanism aims to ensure transparency, impartiality, and independence by forming a three-member Dispute Resolution Committee (DRC) consisting of individuals known for their impeccable integrity.
The primary focus of the mechanism is to handle cases related to time extensions due to recognized force majeure events, unforeseen circumstances not covered by contractual agreements, and disputes unrelated to time extensions.
According to the process, in the event of a dispute, the renewable energy implementing agency (REIA) must be the first point of contact. The REIA will provide speaking orders on the requests to ensure that renewable projects proceed. If any party involved is dissatisfied with the REIA’s decision, they have the right to appeal to the DRC.
To initiate an appeal, developers and EPC contractors must submit an application along with a prescribed fee, which varies depending on the type of dispute and the presence of a performance bank guarantee. In cases where the appeal is successful, the collected fee will be refunded if recommended by the DRC and approved by the government.
The DRC, consisting of a minimum of two members, will review the referred cases and provide recommendations to the MNRE within 21 days. The MNRE, in consultation with the Integrated Finance Division, will then review the recommendations and make a final decision within 21 days of receiving them.
Furthermore, the dispute resolution mechanism will also cover power purchase agreements between state/union territory governments/entities and developers, provided they agree to bear the DRC’s sitting fees and associated expenses.
The procedural guidelines for the Dispute Resolution Mechanism include convening DRC meetings at least once every week, adhering to the 21-day decision period, with the possibility of a 14-day extension. The DRC will have the authority to interact with relevant parties involved in the case and record their views. The presentation of the case will not involve lawyers, and the REIA can present their arguments. If necessary, the DRC may interact with the MNRE through the ministry’s designated nodal point.
It is important to note that no coercive action should be taken on cases brought before the DRC until the final disposal of the appeal. Additionally, a separate mechanism for conciliation was introduced by the Ministry of Power last year to settle contractual disputes in power projects under its administrative control.
The implementation of this dispute resolution mechanism by the MNRE aims to ensure a fair and efficient resolution of disputes in the renewable energy sector, promoting transparency and fostering a conducive environment for the growth of clean energy projects in India.
View the official document here