As India embarks on an increased spend on infrastructure to speed up economic growth, legal experts have pointed out several issues that need resolution to spur investment. Speaking at a panel discussion moderated by CNBC-TV18's Ashmit Kumar at the Legal Powerlist 2022 summit, General Counsel at Cube Highways Mukul Shastry has called for strengthening the existing dispute resolution mechanism in the infrastructure sector.
Stressing the need to address issues in the energy space to win the confidence of investors, Shastry explained that even small land acquisition issues can create problems in the execution of big projects. He noted that it's not easy to solve these issues only with more money, as land owners may have an emotional attachment to land, especially if it houses a religious structure like a temple or a mosque.
Lauding the
foreign direct investment (FDI), which already marked its entry into the infrastructure sector, he stated that the potential is much greater as the investment can possibly provide a fillip of three times in the accrued returns. Terming lapse of time, lack of contract enforcement and policy changes as challenges for dispute resolution in the infrastructure sector, he praised the incidence of seats of arbitration in Delhi, Mumbai and Hyderabad, adding that a bigger challenge is enforcement, which is being addressed via the Vivad se Vishwas scheme.
Speaking at the discussion titled "Powering Progress: Navigating Challenges and Opportunities in India's Infrastructure, Energy, and Oil & Gas Sectors", Malav Deliwala (Head-Legal) at Adani Power Limited and Adani Energy Solutions stressed on the need to improve awareness in the regulatory sector.
Referring to electricity regulatory commissions (ERCs), Deliwala pointed out a lack of legal members on the adjudicating bench as well as conflicts of interest as major problems. For this, he cited an example of a signatory authority with a discom sitting to decide a case as a bench member, only to recuse once he realised the conflict of interest. With commercial unviability not being taken as a reason for force majeure, he questioned how the benefits flow to the public if public projects don't survive the initial phase.
Speaking at the discussion titled 'Powering Progress: Navigating Challenges and Opportunities in India's Infrastructure, Energy, and Oil & Gas Sectors', Malav Deliwala (Head-Legal) at Adani Power Limited and Adani Energy Solutions stressed the need to improve awareness in the regulatory sector.
Referring to electricity regulatory commissions (ERCs), Deliwala pointed out a lack of legal members on the adjudicating bench as well as conflicts of interest as major problems. For this, he cited an example of a signatory authority with a discom sitting to decide a case as a bench member, only to recuse once he realised the conflict of interest. With commercial unviability not being taken as a reason for force majeure, he questioned how the benefits flow to the public if public projects don't survive the initial phase.
Referring to the recent G20 declaration while talking of tripling solar capacity, managing partner with the Charter Law Chambers, Hemant Singh, called for more FDI inflows and confidence to attract investment via resolution of ground-level problems.
Citing the absence of any standard PPA (Power Purchase Agreement) by the Solar Energy Corporation of India (SECI), grid support charges and the exemption of generators of renewable energy from transmission charges, Singh said that such problems need to be pragmatically resolved as industrial consumers are being asked to compulsorily take such access, which is leading to more litigation.
Stating that civil jurisprudence can't be applied to decide regulatory issues, he pointed out that while State Electricity Commissions often strike discordant notes through varied laws across India, they themselves feel throttled over being bound by central rules. He said that most tribunals dealing with cases relating to electricity decide them quickly, and there are already minimal arbitrations in the sector, adding that the government clarifying the rules on some issues will further clear things up.
(Edited by : Keshav Singh Chundawat)
First Published: Sept 23, 2023 6:09 PM IST
