Special laws govern disputes between generating companies, affirming the maintainability of arbitration clauses in power purchase agreements despite jurisdictional objections from the parties.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)--IL&FS Energy Development Co. Ltd. [hereinafter "IL&FS"] by way of the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 [hereinafter "the Act"] seeks appointment of an Arbitral Tribunal for adjudication of disputes in relation to and arising from `POWER PURCHASE AGREEMENT' dated 16th October, 2014 [hereinafter "PPA"]. The said PPA contains an arbitration clause [Clause 16] which reads as follows:

"16. DISPUTE RESOLUTION

16.1 If any dispute or difference of any kind whatsoever shall arise between the Parties in connection with or arising out of this Agreement or out of the breach, termination or invalidity of the Agreement hereof ("Dispute"), any of the Parties shall notify the other of the existence of such Dispute and both Parties shall attempt, in good faith, to resolve the Dispute through mutual discussions within fifteen (15) days of such notification.

16.2 Notwithstanding the existence of any dispute except for non-payment, the Parties hereto shall continue to perform their respective undisputed obligations under this Agreement throughout the Term of this Agreement.

16.3 In the event that the Dispute is not resolved in terms of Clause 16.1 above, the Parties shall submit the Dispute to arbitration in accordance with the Arbitration and Conciliation Act, 1996. The arbitral tribunal shall comprise of three arbitrators. One arbitrator shalt be appointed by each Party. The two appointed arbitrators shall nominate the third arbitrator who shall serve as the presiding arbitrator.

16.4 The award of the arbitral tribunal shall be conclusive and binding on the Parties. The arbitral tribunal shall give a reasoned award. The arbitration shall be conducted in Delhi. The Parties shall bear the costs of arbitration as directed by the arbitral tribunal.

16.5 All disputes arising from this Agreement shall, subject to Clause 16.3 above, be within the exclusive jurisdiction of the Courts at Delhi."

2. The existence of the afore-noted PPA is not in dispute. Yet, Respondent viz. Amity University [hereinafter "Amity"] strongly opposes the maintainability of the petition, contending that this Court does not have the jurisdiction to refer the parties to arbitration. The parties are `generating companies' as defined under the Electricity Act, 2003 [hereinafter "EA"], and disputes between them in relation to the PPA fall squarely within the ambit of EA and exclusive jurisdiction for adjudication thereof vests with the concerned State Electricity Regulation Commission [hereinafter "SERC"].

CONTENTIONS OF THE PARTIES

FOR AMITY UNIVERSITY

3. Mr. Sandeep Sethi, Senior Counsel who had argued the matter on behalf of Amity along with Mr. Darpan Wadhwa, Senior Counsel and Mr. Tanmaya Mehta, contend that disputes raised by IL&FS fall squarely within the scope of Section 86(1)(f) of EA and thus, the appropriate forum for adjudication is Uttar Pradesh Electricity Regulatory Commission [hereinafter "UPERC"]. The afore-said provision reads as under:

"Section 86. (Functions of State Commission): -- (1) The State Commission shall discharge the following functions, namely:

(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:

Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;

(b) regulate e