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July 21, 2001
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Money > Business Headlines > Report July 21, 2001 |
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Dabhol global lenders move SCS Ravindran The global lenders to the Enron-promoted Dabhol power project in Maharashtra moved the Supreme Court on Friday even as the domestic lenders stayed away. This comes close on the heels of the Dabhol Power Company filing a writ petition in the Supreme Court on Wednesday. "We filed a writ petition on Thursday and although the domestic lenders had at no time said that they will join us, they knew about our plans to move the apex court today (Friday)," said a source in the international lenders consortium. The global lenders to the project include ABN-Amro, Credit Suisse First Boston, the ANZ banking group and Citibank. The Indian lenders include the financial institutions Industrial Development Bank of India, Industrial Finance Corporation of India, ICICI and State Bank of India, apart from a clutch of nationalised banks. "We have not arrived at a consensus on the issue of moving the Supreme Court. The legal option may not perhaps be the best one to pursue," said a source in the domestic lenders' consortium. Another senior executive in a domestic financial institution said that the domestic lenders were yet to take a decision on the issue. The essence of both writ petitions is that the proper forum for settling all disputes between Enron-promoted company and the Maharashtra State Electricity Board is an international court and not the Maharashtra Electricity Regulatory Commission. MSEB has been arguing that the disputes should be settled in MERC. DPC however first challenged it unsuccessfully in the Bombay High Court and has now moved the Supreme Court. DPC has taken the line that under clause 20.3 of the power purchase agreement with MSEB all disputes should be settled in the London Court of Arbitration. The global lenders too are arguing for an international forum to resolve the dispute. International lenders pointed out that the domestic lenders being state-owned are caught in a bind. The disputes are not only with MSEB but also with the Union government which has refused to honour the counter guarantee invoked by DPC. "The domestic lenders can hardly be seen as fighting against their own government," sources in the consortium of international lenders said. A senior official of a financial institution refuted this saying, "The government would certainly expect us to look after our own interests." Legal advisors call meet In a parallel development, the legal advisors to the lenders, White & Case have convened a meeting in London to stake stock of the situation. This is being attended by both domestic and global lenders. Powered by YOU MAY ALSO WANT TO READ:
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