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`MERC cannot solve Dabhol dispute'

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MUMBAI, Jan. 17

MEMBERS of the Maharashtra State Electricity Regulatory Commission (MERC) are not competent to solve the dispute between the Enron-promoted Dabhol Power Company and the Maharashtra State Electricity Board, according to Mr P. Chidambaram, DPC counsel.

Mr Chidambaram told the Mumbai High Court on Thursday that MERC did not have the powers to grant declaratory relief sought by MSEB on rescinding of the power purchase agreement.

"A commission comprising two retired Government officials and one engineer cannot be expected to settle a legal dispute," he told Mr Justice A.P. Shah and Mr Justice V.K. Tahilramani.

Mr Chidambaram also argued that the dispute between MSEB and DPC was a "money claim arising out of a misdeclaration, arising out of a breach of contract" and so cannot be heard by the commission.

He argued that the ERC Act was inadequate for solving a dispute, which was essentially a "civil dispute" as it did not provide for any machinery for conducting an arbitration or award.

"The ERC Act provides that the State regulatory commissions adjudicate upon differences and disputes `between' licensees and utilities `and' refer the same for arbitration," he said.

Mr Chidambaram said going by the above definition, MERC had no choice but to refer the dispute for arbitration. He said the functions of the electricity regulatory commissions essentially included settling of tariff dispute while DPC and MSEB were arguing a breach of contract.

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