The Hindu : National : Dabhol: Paris court ruling "non-executable"

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Wednesday, May 04, 2005

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Dabhol: Paris court ruling "non-executable"

Special Correspondent

MUMBAI: Sources in Maharashtra's power sector have dismissed the Paris court ruling as ``non-executable'' in India and pointed out that the Supreme Court was hearing the matter relating to these very issues. They also doubted if rulings such as this would place Bechtel and GE, the other multinational shareholder in DPC, at an advantage in the process of reaching a negotiated settlement.

The International Court of Arbitration, in a unanimous ruling, asked Maharashtra and two affiliate agencies to pay $125 million as compensation to a Bechtel affiliate, Energy Enterprises (Mauritius) Company, that owns 10 per cent of the $3 billion Dabhol Power Company (DPC).

From the viewpoint of Bechtel, however, this is an important development. The ruling, a source said, had nothing to do with the case in India. It related to a shareholder agreement signed in New York between Bechtel, GE and the affiliates of the Maharashtra Government and was subject to U.S. law. The source pointed out that if such rulings were considered not executable in India and subject to Indian courts, then the message being given to foreign investors was that it was risky signing agreements with Indian companies outside India.

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