Summary
The Court upheld carrying costs for the approved change-in-law claims under the power-purchase agreements containing an express restoration clause. Tariff adjustment operated from the effective withdrawal of tax exemptions, and carrying costs restored the generator to the same economic position pending regulatory approval. The entitlement arose from the agreements themselves.
Issues
- Whether the relevant PPAs authorized carrying costs between the effective change in law and regulatory approval.
- Whether the claim impermissibly relied on equity outside the contractual limits.
Provisions considered
- Articles 13.2 and 13.4, Power Purchase Agreements under considerationThe express restoration principle governed tariff adjustment from the effective change-in-law date and supported carrying costs for the intervening period. (¶¶ 5, 6, 7, 8, 9, 10, 13, 16)
- Articles 11.8 and 18.17, Power Purchase Agreements under considerationThe supplementary-billing mechanism and limitation on consequential losses did not defeat carrying costs expressly attributable to Article 13. (¶¶ 4, 5, 10, 11)
Held
- Article 13.2 embodied a contractual restitution principle. Its operation-period threshold had admittedly been crossed, and compensation had to restore the affected party to the position it would have occupied without the change in law. (¶¶ 5, 7, 8)
- Withdrawal of the exemptions attracted the provision making tariff adjustment effective from the change itself, rather than the provision dealing with a later interpretative judgment. The additional Gujarat wording did not alter that conclusion. (¶¶ 6, 9, 10)
- Because regulatory recognition occurred only later, carrying costs for the intervening deprivation were required by Article 13. The claim did not depend on a free-standing equitable remedy outside the PPA. (¶¶ 10, 11, 12, 13, 14)
- The relied-on authorities turning on other regulatory or contractual regimes did not defeat the express restoration clause. The Tribunal’s allowance was upheld within the contractual scope it had identified, which excluded Gujarat Bid-01 lacking such a restoration provision. (¶¶ 1, 11, 12, 13, 14, 15, 16, 17)
Result
Both appeals dismissed; Tribunal’s carrying-cost determination upheld within the scope of the relevant PPAs.