COVID-19 lockdown qualifies as force majeure for UP transmission project, APTEL upholds COD extension

Obra-C Badaun Transmission Limited (OBTL), an intra-State transmission licensee, sought an extension of the Scheduled Commercial Operation Date (SCOD) for elements of its project, relying on COVID-19-related force majeure.

The Uttar Pradesh Electricity Regulatory Commission allowed the extension, and the distribution licensees appealed, arguing that the pandemic had not affected project progress and that the Commission had not justified the extension on a day-for-day basis.

Whether the COVID-19 pandemic and the subsequent lockdown constituted a force majeure event under the TSA, entitling OBTL to an extension of the project’s SCOD.

Article 4.4.2 of the TSA provides that where a project element cannot be commissioned by its SCOD due to a force majeure event under Article 11, the SCOD is extended on a day-for-day basis, subject to a maximum of 180 days.

Article 11.3 defines force majeure as an event or circumstance beyond the affected party’s reasonable control that wholly or partly prevents, or unavoidably delays, performance, and includes specified natural and non-natural events; Article 11.4 sets out exclusions.

The Tribunal treated the pandemic’s effects, including disruption to work and movement resulting from government restrictions, as capable of qualifying under Article 11.3, and specifically concluded that COVID-19 fell within Article 11.3(b)(ii).

The Tribunal found that OBTL had repeatedly notified the licensees of COVID-19-related effects on construction and sought SCOD extensions, without receiving responses to those notices.

It rejected the argument that OBTL’s September 2020 notice forecasting readiness by the original SCOD amounted to an admission that the project was unaffected: that notice had to be read alongside OBTL’s later notice describing continuing restrictions and project impacts.

The Tribunal also relied on UPPCL’s own grant of a three-month extension and on governmental recognition of COVID-19’s impact on transmission projects.

Although the relevant Ministry of Power notifications applied to inter-State projects, the Tribunal held that this did not establish that COVID-19 was not a force majeure event for an intra-State project.

It dismissed the appeal as devoid of merit and disposed of the pending interlocutory applications.