The Ministry of New & Renewable Energy (MNRE) has announced a revised Dispute Resolution Mechanism (DRM) for the resolution of unforeseen disputes arising in the implementation of contractual agreements related to renewable energy projects. An order to this effect was issued on 7th June, 2023.
The new DRM aims to establish a transparent and unbiased process through an independent Dispute Resolution Committee (DRC). The committee, consisting of eminent individuals of impeccable integrity, will be set up with the approval of the Minister of New & Renewable Energy. The upper age limit for DRC members will be 70 years, and they will be selected from eminent persons located in the National Capital Region (NCR) of Delhi to minimize travel and accommodation expenses. The selection process will ensure no conflict of interest among the committee members.
The revised mechanism will be applicable to all renewable energy schemes, programs, and projects implemented by Renewable Energy Implementing Agencies (REIAs) such as SECI, NTPC, NHPC, SJVN, and other agencies designated by MNRE. Additionally, it will cover contractual agreements between REIAs and EPC contractors involved in the execution of renewable energy projects owned by the REIAs, provided the REIAs commit to abide by the decisions made through this mechanism.
The DRC will consider various types of cases, including appeals related to extension of time, unforeseen issues not covered by contractual agreements, and other disputes between REIAs and RE Power Developers/EPC Contractors. Each application made to the DRC must be accompanied by the applicable fees.
All cases referred to the DRC will be examined in a time-bound manner, and the committee will submit its recommendations to the Ministry of New & Renewable Energy within twenty-one days of the reference date. The recommendations, along with the Ministry’s observations, will be presented to the Honorable Minister of NRE for a final decision.
The DRC members’ fees and other related expenses will be covered by the funds collected through application fees received from the applicants. In cases where the collected fees are insufficient, the REIAs will contribute in equal proportion to cover the deficiency. SECI will act as the nodal agency responsible for collecting the required amounts and making the necessary payments to the DRC members.
The Dispute Resolution Mechanism and its modalities, as outlined in the Ministry’s order, will also be applicable to Power Purchase Agreements (PPAs) between entities under State Governments/UT Govts./Administration and RE Power Developers. In such cases, the concerned state/UT government/entity must bear the sitting fee and associated expenses of the DRC members and commit to abide by the decisions made through this mechanism.