GE and Bechtel, the multinational companies that acquired 65.8 per cent equity of Enron Corp in Dabhol Power Company (DPC), have initiated arbitration proceedings against the Government of India for breach of Indo-Mauritius treaty.The arbitration launched by Capital India Power Mauritius, a GE arm, and Energy Enterprise Mauritius Co, a Bechtel subsidiary, contends that the dispute between DPC and Maharashtra State Electricity Board (MSEB) led to loss of business for them and the dues towards power supply bills be recovered from the GoI.Sources said that the arbitration tribunal will begin its proceedings in London in September. Ms Ana Roy, director, ministry of finance, MSEB chairman Jayant Kawale and MSEB secretary Sanjay Bhatia will leave for London on Thursday morning to brief the government’s solicitors DLA.The move by GE and Bechtel is crucial as the Delhi high court recently issued notice to Centre on a plea by DPC challenging an interim order restraining it from going ahead with arbitration proceedings in London to invoke the Union government’s counter guarantee in the power purchase agreement signed by the multinational with Maharashtra government.The Centre had maintained that the continuation of arbitral proceedings would be oppressive and inequitable to it. GE and Bechtel have submitted that MSEB has failed to pay monthly bills to DPC and subsequently on May 23, 2001 rescinded the power purchase agreement (PPA) between MSEB and DPC for material misrepresentation and default on the availability of power by DPC. As per the guarantee, state support agreement and the counter guarantee agreement, the dues could have been settled by the Maharashtra government and the Centre. However, both these governments challenged DPC’s intention and supported MSEB’s claims on the front of material misrepresentation.
