APTEL refers to Full Bench whether Force Majeure relief in power contracts includes monetary compensation

East-North Interconnection Company Limited (“Appellant”) was the transmission service provider for the East-North Interconnection Project, including the Purnea–Biharsharif 400 kV transmission line, established pursuant to a Transmission Service Agreement (“TSA”) with the long-term transmission customers.

In August and October 2018, three transmission towers allegedly collapsed because a change in the course of the River Ganges caused severe soil erosion around their foundations.

The Appellant undertook diversion, reconstruction and restoration works, and the line was restored on 29.12.2019. It claimed additional expenditure of ₹94.58 crore, received ₹12 crore from its insurer, and sought recovery of the balance ₹82.58 crore as relief for a Force Majeure event.

The Central Electricity Regulatory Commission rejected the Appellant’s claims in Petition No. 514/MP/2020 by order dated 11.08.2022.

Before the Appellate Tribunal, the Appellant relied on the Tribunal’s earlier decision in Aravali Transmission Service Company Limited v. Rajasthan Electricity Regulatory Commission , which had held that “relief” under a Force Majeure clause could include monetary compensation.

Whether “relief” available to an affected party under a Force Majeure clause in a Power Purchase Agreement or Transmission Service Agreement includes monetary compensation or restitution for costs incurred due to the Force Majeure event?

Whether monetary compensation is available particularly where the agreement: (i) provides only for relief from contractual obligations; (ii) contains a specific extension-of-time mechanism but no cost-assessment mechanism; (iii) expressly provides economic adjustment for Change in Law; (iv) permits termination after a specified Force Majeure period; and (v) provides deemed availability during operational outages?

The Tribunal applied the contractual terms of the TSA, particularly Articles 4.4.2, 11.3, 11.6 and 11.7, which define Force Majeure, require mitigation, protect a party from breach caused by Force Majeure, and provide operational relief through deemed availability and payment of non-escalable transmission charges.

It contrasted these provisions with Article 12.1–12.2, which expressly defines Change in Law and provides mechanisms, thresholds and documentary requirements for compensation for increased costs or reduced revenues.

The Tribunal relied on the principle that courts cannot supply a casus omissus or create a substantive contractual entitlement that the parties have not stipulated, as recognised in State of Jharkhand v. Govind Singh and Mukund Dewangan v. Oriental Insurance Co. Ltd.

It further relied on Energy Watchdog v. CERC , (2017) 14 SCC 80, for the rule that Force Majeure operates as a contractual contingency under Section 32 of the Indian Contract Act, 1872, and that the express contractual allocation of risk must govern.

The Tribunal also referred to Chamundeshwari Electricity Supply Co. Ltd. v. Saisudhir Energy (Chitradurga) Pvt. Ltd. , Civil Appeal No. 6888 of 2018, decided on 25.08.2025, for the principle that competitively bid and regulatorily approved agreements must be enforced according to their express terms.

The Tribunal construed Article 11.7 as providing performance-based relief rather than restitutionary relief.

Article 11.7(a) protected a party from breach to the extent performance was prevented, hindered or delayed, while Article 11.7(b) permitted relief for Force Majeure affecting contractual performance; neither provision expressly identified restoration costs or provided a mechanism for their assessment or recovery.

Article 11.7(c) dealt specifically with operational consequences by prescribing deemed availability and payment of non-escalable transmission charges, but did not transform the general Force Majeure relief into a right to reimbursement.

The Tribunal further reasoned that Article 4.4.2 addressed construction-stage Force Majeure through day-for-day extension of the Scheduled COD for up to 180 days, followed by a termination option.

This indicated that the parties had chosen extension of time and termination—not open-ended cost recovery—as the contractual consequences of prolonged Force Majeure.

In contrast, Article 12.2 expressly provided formulas, thresholds and proof requirements for economic consequences arising from Change in Law.

The absence of equivalent provisions in Article 11 suggested an intentional contractual distinction rather than an omission capable of being judicially supplied.

Accordingly, the Bench declined to read monetary compensation into the word “relief” merely on equitable or restitutive grounds.

However, it did not finally decide the Appellant’s entitlement or the other issues in the appeal.

Since this view conflicted with the earlier decision in Aravali , the Tribunal directed the Registry to place the matter before the Acting Chairperson for constitution of a Full Bench to decide the referred question authoritatively and bindingly.