CTUIL issues SOP for force majeure and change in law claims
Central Transmission Utility of India Limited (CTUIL) has issued a final procedural advisory setting out the standard operating procedure for processing force majeure (FM) and change in law (CIL) events. The advisory takes effect immediately and applies to Transmission Service Providers (TSPs) seeking relief under their Transmission Service Agreements (TSAs).
Under the advisory, TSPs must notify CTUIL of any FM or CIL event within the timelines prescribed in the TSA. Each submission must clearly cite the relevant clause and sub-clause of the TSA under which the claim is being filed. CTUIL has said the format is intended to bring consistency to the handling of such cases.
Consolidated FM summary
For force majeure events, TSPs will have to submit a consolidated summary after completion of the project. The summary must include all FM occurrences and details of overlapping periods so that CTUIL can calculate the net delay proposed for condonation.
The advisory notes that many FM events occur concurrently, making a consolidated review necessary for assessing delays.
CIL scrutiny
For change in law claims, TSPs will have to submit a statutory auditor’s certificate to support the actual expenditure incurred. These claims will be reviewed on a case-by-case basis.
CTUIL said the documentation requirement is meant to establish the financial basis for each CIL claim before relief is considered.
Committee review
CTUIL has also constituted a committee to examine the claims. The panel will include a member from CTUIL, a representative from the Central Electricity Authority (CEA), a member from the respective Regional Power Committee (RPC) and two representatives from DISCOMs, nominated by the respective RPCs.
TSPs will have to present their cases in person before the committee. The panel will then make recommendations on admissibility and on the quantum of relief for FM and CIL claims.
Industry impact
The SOP is intended to provide a uniform framework for handling delays and cost overruns arising from uncontrollable events such as natural disasters, changes in tax laws or regulatory shifts.
Industry participants said the requirement for consolidated event analysis and auditor certification may reduce disputes and litigation. They also noted that smaller developers may face added administrative work in preparing the required reports.
CTUIL said the advisory reinforces project governance under the Electricity Act and the National Tariff Policy.
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