Price Escalation And Change In Foreign Law Cannot Be Considered A Force Majeure Event: Delhi HC

Must Read

SC: Under-21 Convicts Can Be Given Less Than Minimum Sentence, Resorts To Probation of Offenders Act

The Supreme Court resorted to the Probation of Offenders Act to sidestep the mandate under Section 397 of the Indian Penal Code that mentions a sentence of not less than 7 years to those convicted of armed robbery, to give a chance to two young convicts to reform their lives.

Environment Protection Act Passed at the Instance of Foreign Powers: NHAI in Karnataka HC

The National Highways Authority of India (NHAI) claimed in a submission that the Environment Protection Act 1986 was passed not only for the protection of the environment by the parliament but also at the instance of foreign powers. This statement was made while referring to a UN conference and got the NHAI into great trouble in the Karnataka High Court.

Delhi High Court To Implement a Hybrid System Through Virtual and Physical Hearing

On Friday the Delhi High Court said that they have initiated steps to implement a mode wherein hearing can be done by virtual as well as physical mode. The Delhi High Court is aiming to implement the Hybrid mode. It stated that when the particular bench is conducting a virtual hearing the lawyer may opt for this mode after giving prior intimation about the same.

Mercy Plea of Rajiv Gandhi Assassination Case To Be Decided in Four Weeks, TN Governor To Supreme Court

Tamil Nadu Governor Banwarilal Purohit on Thursday told the Supreme Court that a decision on the mercy petition of one of the convicts serving a life sentence for the assassination of former Prime Minister Rajiv Gandhi, AG Perarivalan will be taken within four weeks. The petition has been pending with the Governor since December 30, 2015.

Bombay High Court Questions FIR Over Journalist Alleged of Communist Comment on WhatsApp

An FIR lodged against the editor of Marathi newspaper, Rajkumar Chhajed has been questioned by the Bombay High Court. The Maharashtra Police has accused Chhajed of creating a rift between the two communities based on a WhatsApp message.

Allahabad High Court Expresses Dissatisfaction on Counsels Seeking Unnecessary Adjournments

The petition had been filed by Smt. Radha prayed to issue directions to Judicial Magistrate-I in Faizabad. The petition...

Follow us

The Delhi High Court (“HC) in the case of Coastal Andhra Power Limited v. Andhra Pradesh Central Power Distribution Co. Ltd. Has held that price escalation and change in foreign law cannot be considered a force majeure event.

The judgment was delivered by a Division Bench of Justices Sanjiv Khanna and Anup Jairam Bhambhani while dealing with an appeal against vacation of an interim order in a proceeding under Section 9 of the Arbitration and Conciliation Act.

The judgment was delivered in the context of the power purchase agreement between the parties and Coastal Andhra Power Limited had claimed that the increase in price of coal in Indonesia which happened as a result of the amendment of Indonesian law would qualify as a force majeure event and would entitle it to rescind the contract without any liability.

The appellant Coastal Andhra Power Ltd had agreed to supply power to Andhra Pradesh Central Power Distribution Co. Ltd (APCPDL) under a PPA. The coal for power generation was to be imported from Indonesia. Meanwhile, there occurred a change in Indonesian laws, which led to a price rise of coal. In that backdrop, Coastal Andhra said that power generation will not be viable without renegotiation of prices. Not willing to renegotiate prices, APCPDL terminated the contract and sought for damages of Rs.400 crores from Coastal Andhra, for breach of contract.

The HC held that such changes in price and changes in foreign law cannot be held to be a force majeure event, as it was not an event which could render the performance of the contract impossible. Further, it also held that a change in prices of coal risk that the parties knowingly undertook before entering the contract. Consequently, it held that alternative arrangements, at higher prices, could be made and the performance of the contract could be carried on.

Meanwhile, Coastal Andhra had approached the Central Electricity Regulatory Commission (CERC) under the Electricity Act, as disputes relating to price tariff under the Agreement had to be submitted to it. Therefore, there were parallel proceedings going on, before the CERC and also the Division Bench of High Court. CERC, however, closed the proceedings on August 4, 2015, in view of the pendency of proceedings in High Court.

Upon a perusal of the foregoing dictum of the Supreme Court, it is clear that change in Indonesian law and consequential increase in the price of coal in Indonesia has been specifically held not to amount to change in law or to force majeure within the meaning of the Agreement.

The appellant made an alternative prayer for the continuation of interim order till it invokes the jurisdiction of the CERC by filing appropriate application. This prayer was rejected by the Court, holding that interim relief can be granted only in aid of the main relief. When the main proceeding itself is held to be not maintainable, no interim prayer can be granted to enable the party to invoke alternate remedies, the bench held. Reference was made to the constitution bench decision in the State of Orissa vs. Madan Gopal Rungta on this point.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

SC: Under-21 Convicts Can Be Given Less Than Minimum Sentence, Resorts To Probation of Offenders Act

The Supreme Court resorted to the Probation of Offenders Act to sidestep the mandate under Section 397 of the Indian Penal Code that mentions a sentence of not less than 7 years to those convicted of armed robbery, to give a chance to two young convicts to reform their lives.

Environment Protection Act Passed at the Instance of Foreign Powers: NHAI in Karnataka HC

The National Highways Authority of India (NHAI) claimed in a submission that the Environment Protection Act 1986 was passed not only for the protection of the environment by the parliament but also at the instance of foreign powers. This statement was made while referring to a UN conference and got the NHAI into great trouble in the Karnataka High Court.

Delhi High Court To Implement a Hybrid System Through Virtual and Physical Hearing

On Friday the Delhi High Court said that they have initiated steps to implement a mode wherein hearing can be done by virtual as well as physical mode. The Delhi High Court is aiming to implement the Hybrid mode. It stated that when the particular bench is conducting a virtual hearing the lawyer may opt for this mode after giving prior intimation about the same.

Mercy Plea of Rajiv Gandhi Assassination Case To Be Decided in Four Weeks, TN Governor To Supreme Court

Tamil Nadu Governor Banwarilal Purohit on Thursday told the Supreme Court that a decision on the mercy petition of one of the convicts serving a life sentence for the assassination of former Prime Minister Rajiv Gandhi, AG Perarivalan will be taken within four weeks. The petition has been pending with the Governor since December 30, 2015.

Bombay High Court Questions FIR Over Journalist Alleged of Communist Comment on WhatsApp

An FIR lodged against the editor of Marathi newspaper, Rajkumar Chhajed has been questioned by the Bombay High Court. The Maharashtra Police has accused Chhajed of creating a rift between the two communities based on a WhatsApp message.

Allahabad High Court Expresses Dissatisfaction on Counsels Seeking Unnecessary Adjournments

The petition had been filed by Smt. Radha prayed to issue directions to Judicial Magistrate-I in Faizabad. The petition sought a speedy decision in...

[Delhi Riots] When the IT Ministry Calls Us, We Will Go Says Harish Salve To Delhi High Court

The Vice President and Managing Director of Facebook, Ajit Mohan told the Supreme Court that when the representatives of the company are called by the Information Technology Ministry they will come and record their statements.

Allahabad High Court Seeks Response on Compensation of Cutting Trees From National Highways Authority of India (Nhai) 

The Order had come in the form of a Public Interest Litigation (PIL) filed by a bunch of law students in Uttar Pradesh. The...

Doctrine of Proportionality Must Adhere to Reasonableness Principal Test: Madras High Court

Young Men's Christian Association built a commercial complex and leased it without having due permission. The District Collector & Tahsildar issued a show-cause notice...

Delhi High Court Refuses To Stay Release of ‘The White Tiger’ on the OTT Platform Netflix

A plea requesting a stay on the release of the film ‘The White Tiger’ by the American producer, John Hart Jr. alleging copyright violation was rejected by the Delhi High Court on Thursday.

More Articles Like This

- Advertisement -