Gangtok: 30 April, 2012
The Energy and Power department of Government of Sikkim and it’s joint venture partner Teesta Urja Limited, the private developer of the 1200 MW Mega Teesta Stage III Hydro Power Project at Chungthang in North Sikkim, seem to have developed serious disputes.
Teesta Urja has recently on April 25, obtained a stay on the order of State Electricity Regulatory Commission appointing a sole arbitrator upon an application filed by the government of Sikkim. The state government had approached the State Electricity Regulatory Commission on April 5 alleging that Teesta Urja has denied the government it’s 26 percent equity shares in the Rs. 6000 crore mega power project, a pre-condition in the Memorandum of Understanding signed by the company with the government. The state commission appointed a sole arbitrator to resolve the dispute on the same day without granting a hearing to Teesta Urja on the application.
Teesta Urja Limited filed an appeal before the Central Electricity Regulatory Commission against the order of the State Regulatory Commission, referring the matter to a sole arbitrator. The matter is fixed for final hearing and disposal before the Commission.
It may be noted that Asian Genco Pvt Ltd. has recently acquired 50.9 percent equity shares entitling it to be the controlling shareholder in Teesta Urja whereas, Athena Projects controls 29 percent equity shares in the current set up.
Apart from approaching the State Commission for appointment of the arbitrator under the provisions of the Electricity Act, 2003, the state government had also approached the District Judge East and North District at Gangtok, under Section 9 of the Arbitration Act, 1996, praying for interim injunction restraining Teesta Urja from changing the constitution of its board of directors. The District Judge through an Order dated April 7, passed an interim order restraining the company from re-constituting its board of directors. The matter is set for further hearing on May 11. The government of Sikkim apart from staking claim of 26 percent equity shares has also raised a claim with respect to its right to appoint two directors.