Claimant 6 27

TEAM CODE: ‘YALUNG KHANG’
FOURTH BRU FOUNDATION MOOT COURT COMPETITION

(ARBITRATION), 2023
BANGLADESH POWER DEVELOPMENT BOARD (BPDB)
CLAIMANT
v.
HIMALAYAN HYDRO NEPAL LTD (HH NEPAL)
RESPONDENT
MEMORIAL FOR THE CLAIMANT

JUNE 2023
On submission to the Singapore International Arbitration Centre (SIAC)

(6th Edition, 1 August 2016)
i|Page
TABLE OF CONTENTS
LIST OF ABBREVIATIONS..................................................................................................5
INDEX OF AUTHORITIES...................................................................................................8
CASE LAWS CITED.............................................................................................................16
STATEMENT OF JURISDICTION....................................................................................20
STATEMENT OF FACTS....................................................................................................21
ISSUES RAISED....................................................................................................................23
SUMMARY OF ARGUMENTS...........................................................................................24
ARGUMENTS ADVANCED................................................................................................26
ISSUE I- WHETHER OR NOT THE CLAIMANT WAS REQUIRED TO JOIN GRID

POWER CORPORATION OF INDIA (“GPC INDIA”) AS A RESPONDENT IN THE
PRESENT ARBITRATION?................................................................................................26
1. RESPONDENT DIDN’T RESUME COMPLIANCE WITH ITS OBLIGATION

UNDER THE PSA...................................................................................................................26
2. THE DOCTRINE OF PRIVITY OF CONTRACT PREVENTS CLAIMANT

FROM INCLUDING GPC INDIA AS A RESPONDENT..............................................28
3. LACK OF EVIDENCE CONNECTING GPC INDIA TO THE DISPUTE AS

PARTY OBLIGED TO RESUME SUPPLY OF ELECTRICITY................................29
A. RESPONDENT UNILATERALLY EXERCISED FORCE MAJEURE CLAUSE.. .29
B. CHANGE IN LAW IN INDIA DOES NOT AFFECT RESPONDENT IN

FULFILING IT’S OBLIGATIONS.............................................................................29
C. RESPONDENT ACTED IN BAD FAITH IN INVOKING FORCE MAJEURE......30
4. GPC INDIA DOES NOT FULFIL REQUIREMENTS UNDER SIAC NEITHER AS

JOINDER NOR AS CONSOLIDATOR.............................................................................31
A. GPC INDIA DOES NOT FULFIL JOINDER REQUIREMENT UNDER SIAC......31
B. PRESENT ISSUE DOES NOT FULFIL CONSOLIDATION REQUIREMENT

UNDER SIAC..............................................................................................................32
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C. PRESENT SCENARIO DOES NOT SATISFIES MULTIPLE CONTRACT
REQUIREMENT UNDER SIAC................................................................................33
ISSUE II: WHETHER OR NOT THERE EXISTED A SITUATION OF FORCE

MAJEURE THAT PREVENETED THE RESPONDENT FROM DISCHARGING ITS
OBLIGATIONS UNDER POWER SALES AGREEMENT DATED 16 JULY 2020?...33
1. THERE WAS A SITUATION OF HARDSHIP................................................................33
2. THE RESPONDENT IS REQUIRED TO FULFIL PROCEDURE PURSUANT TO

CLAUSE 21.1.2 OF CONTRACT:.......................................................................................35
A. "INABILITY TO CONFER UPON THE RESPONDENT THE BENEFIT OF

EXEMPTION FROM CONTRACTUAL OBLIGATION"........................................35
B. "NON-COMPLIANCE WITH FORCE MAJEURE PREREQUISITES BY THE

RESPONDENT AS GROUNDS FOR DENYING THE BENEFIT".........................36
3. AMENDMENT IN ACTS CONFERRS AS AN EXCEPTION OF FORCE

MAJEURE.................................................................................................................................39
A. LACK OF PREREQUISITES FOR ACTIVATION OF LEGAL IMPRACTIBILITY

IN BEHALF OF RESPONDENT................................................................................39
B. THE SITUATION PROVES TO BE EXCEPTION OF FORCE MAJEURE............40
4. THE RESPONDENT HAS FAILED TO FULFIL ITS CONTRACTUAL

OBLIGATIONS UNDER PSA..............................................................................................41
A. THE RESPONDENT IS ENTITLED TO ENSURE THE PRINCIPLE OF

SANCTITY OF CONTRACT.....................................................................................41
B. THE RESPONDENT HAS FAILED TO COMPLY WITH DUTY TO MITIGATE

THE UNFAVOURABLE SITUATION,.....................................................................42
C. RESPONDENT CAN’T INVOKE THE FORCE MAJEURE PROVISIONS TO

ESCAPE LIABILITY..................................................................................................42
5. THE RESPONDENT HAS NO LEGAL RIGHT FOR TERMINATION OF

CONTACT.................................................................................................................................43
A. THE NOTICE OF FORCE MAJUERE BY RESPONDENT IS PRIMA FAICE

INVALID.....................................................................................................................43
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B. RESPONDENT UNANIMOUSLY TRIED TO SEEK THE MEASURES FOR
AVOIDANCE OF LIABILITY...................................................................................44
ISSUE III: IF SUCH A SITUATION EXISTED, THEN WHETHER OR NOT THE

SAID SITUATION IMPACTED THE RESPONDENT’S ABILITY TO DISCHARGE
ITS CONTRACTUAL OBLIGATIONS UNDER THE POWER SALES AGREEMENT
DATED 16 JULY 2020?........................................................................................................44
1. THE SITUATION OF HARDSHIP EXISTED.............................................................44
2. GPC INDIA'S MAJORITY STAKE AND INTERESTS IN THE RESPONDER'S

HOLDINGS...............................................................................................................................47
3. UNLAWFUL INTERPRETATION OF ELECTRICITY ACT 2003 BY

RESPONDENT.........................................................................................................................47
4. FAILURE TO COMPLY WITH THE STANDARD OF AN EXPORT-ORIENTED

PROJECT..................................................................................................................................48
A. LACK OF VOLITION TO PURSUE ALTERNATIVES TO MITIGATE THE

SITUATION OF HARDSHIP.....................................................................................49
B. BLATANT NEGLIGENCE IN THE AFTERMATH OF A HEATED AND

CONTROVERSIAL BILL DEBATE FOR A PERIOD OF 15 DAYS.......................50
C. DEFICIENCY IN CONSISTENT AND UPDATED COMMUNICATION WITH

THE CLAIMANT........................................................................................................51
ISSUE IV: WHETHER OR NOT THE RESPONDENT IS LIABLE TO PAY

DAMAGES TO THE CLAIMANTAND RESUME COMPLIANCE WITH ITS
OBLIGATIONS UNDER THE POWER SALES AGREEMENT DATED 16 JULY
2020?........................................................................................................................................52
1. RESPONDENT IS LIABLE TO PAY DAMAGE AS A FAILURE TO COMPLY

WITH TRANSMISSION OBLIGATIONS UNDER PSA...............................................52
2. THE RESPONDENT IS LIABLE TO RESUME COMPLIANCE WITH ITS

OBLIGATIONS UNDER THE POWER SALES AGREEMENT................................54
PRAYERS OF RELIEF........................................................................................................56
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LIST OF ABBREVIATIONS
& And
AAA American Arbitration Association
art. Article
BOD Board Of Directors
BPDB Bangladesh Power Development Board
CEO Chief Executive Officer
CISG Convention on Contracts for the International Sale of Goods
Claimant Bangladesh Power Development Board
ed, edn Edition
GPC India Grid Power Corporation of India Ltd.
HH Nepal Himalyan Hydro Nepal Ltd.
ICC International Chamber of Commerce
v|Page
ICSID International Centre for Settlement of Investment Disputes
INC Incorporation
KWHr KiloWatt Hour
LCIA London Court of International Arbitration
MW Mega Watt
NEA Nepal Electric Authority
NEPSE Nepal Stock Exchange
NOA Notice of Arbitration
¶, para Paragraph
pg, p Page
PSA Power Sales Agreement
PTA Power Trade Agreement
Respondent Himalyan Hydro Nepal Ltd.
SIAC Singapore International Arbitration Centre
SIAC Rules Singapore International Arbitration Centre Rules(6th edition, 2016)
vi | P a g e
UNCITRAL United Nations Commission on International Law
USD United State Dollar
v. Versus
VCLT Vienna Convention on the Law of Treaties
INDEX OF AUTHORITIES
INTERNATIONAL CONVENTIONS &, TREATIES
S.N NAME PAGE

NO
1 Art. 10 (1) of the ECT 26
2 Vienna Convention on Laws of Treaties Art.26, May,23,1969 51, 53
vii | P a g e
WEBSITES REFERRED
S.N NAME PAGE

NO
1 Schindler,P., Desai, S., Compulsory Consolidation: The next step in International 26
Construction Arbitration available at
http://www.patrickschindler.com/pdf/compulsoryconsolidation (last visited May 20,
2023)
What is a ‘sweep clause’ in an outsourcing or IT services agreement? Available at 27
https://www.lexisnexis.co.uk/legal/guidance/what-is-a-sweep-clause-in-an-
outsourcing-or-it-services-agreement
2 Gerasimtchuk, E., Multi-party Arbitration available at 31
www.uni.kiel.de/eastlaw/ws0102/semarbeiten (last visited May 27, 2023)
3 COVID-19 and force majeure clauses: an examination of arbitral tribunal’s awards 34, 45
available at https://academic.oup.com/ulr/article/25/4/437/6055096 (last visited:
March 22, 2023).
4 Will a court force a party to perform its contractual obligations? 35
Available at https://www.lewissilkin.com/en/insights/will-a-court-force-a-party-to-
perform-its-contractual-obligations (last visited: June 7, 2023).
5 https://www.collinsdictionary.com/dictionary/english/exemption-clause (last visited: 35

June 20, 2023.)
viii | P a g e
6 Hardship provisions & hardship clauses in international business contracts 45
available at http://eurojuris-itl.net/docs/Hardship-clause-2016.pdf (last visited: June
3, 2023)
7 https://contractbook.com/dictionary/ownership-interest (Last Visited: June 1, 2023) 47
8 substantial ownership and effective control definition available at 48

https://www.lawinsider.com/dictionary/substantial-ownership-and-effective-control
(Last Visited: June 1, 2023)
9 52
breach of contract available at
https://www.law.cornell.edu/wex/breach_of_contract (Last Visited: June 2,
2023).
ARTICLES
S.N NAME PAGE

NO
1 Schindler,P., Desai, S., Compulsory Consolidation: The next step in International 26
Construction Arbitration available at
http://www.patrickschindler.com/pdf/compulsoryconsolidation (last visited May
20, 2023)
2 Redfern, A., Hunter, M., Law, and Practice of International Commercial 26
Arbitration (4th Ed.) (Sweet & Maxwell) at 317
ix | P a g e
3 Gerasimtchuk, E., Multi-party Arbitration available at 31
www.uni.kiel.de/eastlaw/ws0102/semarbeiten (last visited May 27, 2023)
4 Karl-Heinz Bockstiegel, The Role of Party Autonomy in International 32
Arbitration, DISP. RES. J., Summer 1997, at 343
5 Matthew D. Schwartz, Note, Multiparty Disputes and Consolidated Arbitrations: 32
An Oxymoron or the Solution to a Continuing DilemmaP, 22 CASE W. RES. J.
INTL L. at 345-46 (1990)
6 Pair & Frankenstein 2011: Lara M. Pair and Paul Frankenstein. "New ICC Rule 32
on Consolidation: Progress Or Change, The." Emory Int'LL.Rev. 25, 2011: p.
1061
7 Hardship, Impracticability, Unconscionability, Unforeseeability in: Legal Effects 33, 44
of Fluctuating Exchange Rates (imf.org)s
8 N.D.Rubins , The Allocation of Costs and Attorney’s Fees in Investor-State 53

Arbitration, 109 ICSID REV–
FOREIGN INV. L. J. 126, 126–129 (2003)
LAWS
S.N NAME Section PAGE NO
1 Civil Code 2074, s 522 49

s 527 36
s 530 28
s 531(1) 27
s 532 51
s 532(2) 27
x|Page
s 535 (1) 53, 54
s 538 53
2 Electricity act-2003, s 38(3) 29, 54
3 SIAC Rules (7th edn, 2016) r6 32

r 7.1 31
r8 32
4 VCLT, 1969, Art.26(1) 41, 115
JUDGMENTS
S.N CASES PAGE
NO
1 Belize Bank Limited v Belize [2018] UKPC 13, Para 10 26
2 JSC VTB Bank v Skurikhin [2012] EWHC 1511 (Comm), [36] (Flaux J) 27
3 Chandris v Isbrandtsen-Moller Co Inc[1951] 1 KB 240 at Page n (244, 245, 246) 27
4 AES Summit Generation Limited and AES-Tisza ErömüKft v. Hungary, ICSID 28

Case No. ARB/07/22, Decision on Jurisdiction (Oct. 23, 2009), para 274
xi | P a g e
5 Occidental Petroleum Corporation and Occidental Exploration and Production 28
Company v The Republic of Ecuador, ICSID Case No. ARB/06/11, para 524
6 Phoenix Action Ltd v Czech Republic, UNCITRAL PCA Case No AA280, para 28
242
7 BayindirInsaatTurizmTicaret Ve Sanayi AS v Islamic Republic of Pakistan 28

(ICSID Case No ARB/03/29),14 November 2005, para 180
8 Reid, Lord. " Beswick v Beswick." [1976] A.C. 114 28
9 Tweddle v Atkinson, EWHC QB J57 (1861) 28
10 Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd [1915] AC 847, 853 28
11 CMS Gas Transmission Co v Argentine Republic (ICSID Case No ARB/01/8) 28

[2005] ILM 44, para 130
12 Salini v Jordan, Decision on Jurisdiction, 29 November 2004, para 126 28
13 Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation 30
and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27,
Decision on Jurisdiction, 10 June 2010, para.169, para.170
14 Lac Lanoux Arbitration (France v Spain) (Award) [1957] XII RIAA 281 30
15 cf. Engineer case; Choi, p. 33; Lew/Mistelis/Kröll, §16-40 31
16 CDC v. Seychelles (ICSID Case No. ARB/02/14), para. 41 31
xii | P a g e
17 Occidental Petroleum Corporation and Occidental Exploration and Production 31
Company v. Republic of Ecuador (ICSID Case No. ARB/06/11), para. 99.
18 Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Decision on 31
Jurisdiction (Jan. 25, 2000)
19 Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Decision on 31
Jurisdiction (Jan. 25, 2000) https://www.italaw.com/sites/default/files/case-
documents/ita0136.pdf. para 121
20 Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12 35
21 Point Energy Partners Permian, LLC v. MRC Permian Co. Supreme Court of 36
Texas (sNo. 21-0461)
22 TGI Office Automation v. Nat’l Elec. Transit Corp., No. 13-CV-3404, 5-6, 51 38
(E.D.N.Y. Sept. 14, 2015)
23 Interocean Oil Development Company v. Nigerian National Petroleum 38
Corporation (ICSID Case No. ARB/13/20)
24 United States v. Panhandle Eastern Corp., 693 F. Supp. 88, 95 (D. Del. 1988) 45
25 Wilmington Firefighters Ass’n v. City of Wilmington, 2002 WL 418032, at Para. 45

10
26 Director General of Irrigation Department Umakant Jha on behalf of Mahakali 48

Irrigation Project, Mahendranagar vs Appellate Court,Patan and others D.NO 8156,
NKP
27 Bituminous Cas. Corp. v. Com. Union Ins. Co. , 273 Ill.App.3d 923, 210 Ill.Dec. 53
216, 652 N.E.2d 1192, 1197 (1995)
xiii | P a g e
28 Occidental Petroleum v Ecuador, Award, 5 October 2012, para 564 53
29 Strabag v Libya, Award, 29 June 2020, paras 881, 899–900. See also C Binder, 54
‘Unjust Enrichment
as a General Principle of Law in Investment Arbitration’ in A Gattini et al (eds)
General Principles of Law
and International Investment Arbitration (2018) 269
30 Nash v. Towne, 72 U.S. (5 Wall.) 689, 701-02 (1866) 55
31 Nuclear Tests (New Zealand v France), Judgment, 1974 I.C.J. Rep. 1974, 457, \\ 53
49 (Dec. 20)
32 Rainbow Warrior’ Affair (New Zealand v France), 20 R.I.A.A. 217, 251 (U.N. 54
Arb. 1990).;Sole arbitrator Dupuy in Texaco v Libya 53 I.L.R. 389, 19 para 51
(Int’l Lab. Org.Admin.Trib.1977)
33 Al-Bahloul v Tajikistan, ICSID Case No. V063/2008, para 24 54
34 Duke Energy v Peru (ICSID Case No. ARB/03/28), 2016 para 253 54
35 Occidental v Ecuador, ICSID Case No. ARB/06/11, para 622 54
36 Occidental v Ecuador, ICSID Case No. ARB/06/11, para 624 54
37 Societe Generale pour la Vente de Combustibles et Lubrifiants SA v Israel 55

Discount Bank Ltd., [1987] QB 946
xiv | P a g e
38 Gazprom OAO v Republic of Lithuania, SCC Case No. 2006/02, para 406-408 55
BOOKS AND COMMENTARIES
S.N NAME PAGE

NO
1 Redfern, A., Hunter, M., Lawand Practice of International Commercial Arbitration 26
(4th Ed.) (Sweet & Maxwell) at 317
2 M. DOMKE, DOMKE ON COMMERCIAL ARBITRATION, § 1:01, at 1-2 (rev. 26
ed. 1984)
3 M. DOMKE, DOMKE ON COMMERCIAL ARBITRATION, § 1:01, at 1-2 (rev. 26

ed. 1984)
4 Hutchison (ED), Pretorius C(ED), Naude T et al (2017), “The Law of Contract”, 30
Third Edition. South Afrca: Oxford University Press Southern Africa (Pty) Limited.
5 Olivier Corten and Pierre Klein (eds.), Les Conventions de Vienne sur le droit des 30
traités: Commentaire,2006, Art 26 para 36
6 Born 2009: Gary B. Born: International Commercial Arbitration. The Hague, 2009, 31
Kluwer Law International. p. 2091
7 Voser & Schellenberg 2009: Nathalie Voser and Wittmer Schellenberg "Multi-Party 31, 33
Disputes and Joinder of Third Parties." In 50 Years of the New York Convention:
ICCA International Arbitration Conference, edited by Van den Berg, Albert Jan.
VOL 14 ed.,343. Dublin, 2009 ICCA Congress Series 2009,p. 358)
xv | P a g e
8 Gary Born, Parties to International Arbitration Agreements, in International 32
CommercialArbitration1525(Gary Born 3 ed. 2021) )
9 Commentary on the Draft Convention on Contracts for the International Sale of 46
Goods, prepared by the Secretariat (UN Doc. A/CONF.97/5)
10 Symons Ben, Force Majeure and Frustration in Commercial Contract, 2022, BPL, 48
pg.4
OTHER DOCUMENTS
S.N NAME PAGE

NO
1 ICC HARDSHIP CLAUSES MARCH 2020, Para.1 33
2 UNIDROIT Principles, Art. 6.2.2 (Definition of Hardship) 34,46
xvi | P a g e
STATEMENT OF JURISDICTION
This Arbitral Tribunal, under Dr. Mary Oliver, derives its jurisdiction from Clause 48 of
the Power Sales Agreement entered into between the parties, read along with the Rules of
Arbitration of the Singapore International Arbitration Centre (hereinafter SIAC). All
parties involved are from states that are party to the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”).
1|Page
STATEMENT OF FACTS
PARTIES
Bangladesh Power Development Board ("BPDB") [hereinafter referred to as

"CLAIMANT"] is a state-owned power distribution company in Bangladesh. BPDB is
responsible for the generation and distribution of 80% of the electricity consumed in
Bangladesh.
Himalayan Hydro Nepal Ltd. ("HH Nepal") [hereinafter referred to as "RESPONDENT"] is

a listed company in Nepal. 50% ownership of RESPONDENT lies with GPC India. Out of
the remaining 40%, 40% is owned by the Nepal Electricity Authority (NEA), and the
remaining 10% is listed on the Nepal Stock Exchange. The main objective of HH Nepal is to
generate electricity for use in Nepal and export surplus electricity.
Grid Power Corporation of India Ltd. [hereinafter referred to as GPC India] is a majority
Indian state-owned entity that owns and manages electricity transmission lines in India. It is a
deemed transmission licensee in terms of the Indian Electricity Act, 2003, as the Central
Transmission Utility.
AGREEMENT
RESPONDENT, GPC India, and the CLAIMANT entered into a tri-partite Power Sales
Agreement (Herein after PSA) on 16 July 2020 for the export of 60% of total generated
electricity from the export-oriented Upper Bishnu Khola Hydropower Plant (Herein after
Project) in the Pahiro Region of Gandaki Province with installed generation capacity of the
Project is 5000 MW.
2|Page
ENSUING EVENTS
The Board of Directors of RESPONDENT consists of two Indian citizens appointed by GPC
India, Mr. Rastra Premi Prasad and Mr. Binod KKR, a senior Nepali NEA official, a female
Board Member chosen from NEPSE investors, and an Independent Director, Mr. Amit Bir
Bikram Shah. Rastra Premi Prasad was the first CEO of RESPONDENT and was succeeded
by Binod KKR in 2021. The PSA was signed for 60% of the Project's electricity export,
providing CLAIMANT with a blended power purchase rate of USD 0.09 per Kwhr.
RESPONDENT was obligated to arrange for delivery at an interconnection facility near
Bangladesh's border. On July 29, 2022, the CLAIMANT made its advance payment for the
fiscal year 2022/23. RESPONDENT began power transmission to CLAIMANT on July 31,
2020.
The Government of India introduced a bill on March 5, 2023, to amend the Electricity Act,
2003, limiting Indian transmission services to foreign entities with substantial ownership and
control. The bill was passed and made into law on March 20, 2023. This law required that
Indian entities may only provide services to foreign entities having substantial ownership of
and effective control by Indian(s) entities. RESPONDENT halted supply of electricity to the
CLAIMANT on 21 March 2023 and wrote mail to the CLAIMANT on 22 March 2023.
CLAIMANT had already made all its payments in good faith but RESPONDENT neglected
its obligations under the PSA and constructed change in law in India as force majeure without
proper justification.
Bangladesh has been experiencing a severe power shortage, resulting in widespread

inconvenience and hardship for its citizens. Many industries were forced to shut down due to
a massive power shortage. The failure of the RESPONDENT to fulfil the supply obligations
under PSA has only exacerbated this situation. CLAIMANT repeatedly urged the
RESPONDENT to take immediate action to remedy the situation and resume the supply of
services without any further delay. As the RESPONDENT failed to fulfill its obligations, the
CLAIMANT was constrained to invoke arbitration in terms of Clause 48 of the PSA.
3|Page
ISSUES RAISED
ISSUE I:
WHETHER OR NOT THE CLAIMANT WAS REQUIRED TO JOIN GRID POWER

CORPORATION OF INDIA (“GPC INDIA”) AS A RESPONDENT IN THE PRESENT
ARBITRATION?
ISSUE II:
WHETHER OR NOT THERE EXISTED A SITUATION OF FORCE MAJEURE THAT

PREVENTED THE RESPONDENT FROM DISCHARGING ITS OBLIGATIONS UNDER
THE POWER SALES AGREEMENT DATED 16 JULY 2020?
ISSUE III:
IF SUCH A SITUATION EXISTED, THEN WHETHER OR NOT THE SAID SITUATION
IMPACTED THE RESPONDENT’S ABILITY TO DISCHARGE ITS CONTRACTUAL
OBLIGATIONS UNDER THE POWER SALES AGREEMENT DATED 16 JULY 2020?
ISSUE IV:
WHETHER OR NOT THE RESPONDENT IS LIABLE TO PAY DAMAGES TO THE
CLAIMANTAND RESUME COMPLIANCE WITH ITS OBLIGATIONS UNDER THE
POWER SALES AGREEMENT DATED 16 JULY 2020?
4|Page
SUMMARY OF ARGUMENTS
ISSUE I: WHETHER OR NOT THE CLAIMANT WAS REQUIRED TO JOIN GRID

PRESENT ARBITRATION?
There is a lack of evidence connecting GPC India to the dispute between the claimant and
respondent. Respondent unilaterally exercised amendments to the Electricity Act of 2003 as a
force majeure event. The change in law in India didn’t affect the respondent's ability to fulfill
its obligations under the PSA. The respondent had obligations to meet its supply
commitments to the Buyer in a timely manner and to coordinate with the Transmission
Licensee in effectively meeting the deliverables, which it failed to comply with. GPC India
doesn’t fulfil joinder, consolidation, and multiple contract requirement under the SIAC rules
and claimant isn’t the party to the PTA. Hence, the claimant wasn’t required to join GPC
India as a respondent in the present arbitration.

MAJEURE THAT PREVENTED THE RESPONDENT FROM DISCHARGING ITS
OBLIGATIONS UNDER POWER SALES AGREEMENT DATED 16 JULY 2020?
The situation of hardship and force majeure though sometimes used interchangeably differs
from each other. The situation of hardship renders the impossibility of performance
temporarily, but the force majeure event can make the performance impossible for both
temporary and permanent periods. The clause of change in law as mentioned in clause 22 of
the PSA and force majeure event as mentioned in clause 21.1.1 needs certain criteria to be
executed as like of beyond the reasonable control of, unforeseeable by the party etc. which
the respondent lacks to do. The force majeure to be complied and executed with mandates for
the fulfilment of use of mitigatory measures and use of reasonable endeavours which the
respondent lacks from its side. The situation so rendered stands as the exception of force
majeure as mentioned in the Sec.531(3) of the Muluki Civil Code Act 2074. Thus, the
situation of force majeure did not exist and so it did not create any obstacle or difficulty for
the respondent in fulfilment of the contractual obligation in good faith.
5|Page
DATED 16 JULY 2020?
The situation of hardship though existed it doesn’t exempt the respondent from fulfilling its
obligation under the PSA agreement. The word hardship and force-majeure though used
interchangeably, refers to different situation. The respondent didn’t comply with the criteria
and benefit which are provided as per the clause 21.3.2 and 21.3.3. The lack of due diligence,
prudent care and mutual co-ordinance to be offered makes the respondent liable to fulfil the
obligation. The respondent has been paid advance amount for the transferrable by the
claimant thus failed to maintain the sanctity of contract and violated the principle of “Pacta
Sunt Servenda”.

DAMAGES TO THE CLAIMANT AND RESUME COMPLIANCE WITH ITS
2020?
The remedy of restitution is based on the Latin principle ‘restitution in intehrum’ meaning
returning everything to the state as it was before’. The general principle of contract law states
that “where there is a breach there is a remedy”. The respondent maliciously interpreted the
amendment in Electricity Authority Act 2003 in order to constitute the event as force majeure
and be relieved from the liability of the contract but the party’s obligation to perform a
contract in good faith involves not only refraining from taking active steps to frustrate or
hinder performance by the other party but also includes taking positive action to cooperate
with and assist the counterparty when necessary. The respondent thus needs to resume the
compliance of the electricity to meet the need and crisis in claimant’s country and also bear
the cost of arbitration and damages on the base of principle of ‘Quantum Meruit’.
6|Page
ARGUMENTS ADVANCED
ISSUE I- WHETHER OR NOT THE CLAIMANT WAS REQUIRED TO JOIN GRID

PRESENT ARBITRATION?
Claimant wasn’t required to join GPC India as a respondent in the present arbitration. Party
autonomy is the first principle to be applied in relation to arbitral procedure, equality of
treatment is the second-and it is of the same importance.1 Some parties may not cooperate
and indeed it may be in their interest if they feel the arbitration would not go their way to
frustrate the process.2 There can be no question either of jurisdiction or enforcement unless
and until it has been shown prima facie that each party against whom some exercise of power
under those provisions is sought has given its (real) consent. 3 An arbitration can validly take
place only if the parties have specifically and expressly agreed to use this method for the
settlement of their disputes, the voluntary nature of arbitration is based on the principle that
the agreement to arbitrate has not been compelled by a third party.4 Exclusion of GPC India
can be justified under four-fold arguments:
1. RESPONDENT DIDN’T RESUME COMPLIANCE WITH ITS OBLIGATION

UNDER THE PSA.
Each Contracting Party shall observe any obligations it has entered into. 5 The PSA in clause
18 mentions about obligations of the seller. The respondent hasn’t met its obligations under
the PSA.
Obligations of Respondent are:
1) To provide the Buyer and Transmission Licensee true and accurate figures in relation to
the electricity generated from the Project and electricity requirements of the Nepalese
Market. These figures are to be provided every quarter of the Nepalese Financial Year. 6
2)To meet its supply commitments to the Buyer in a timely manner.7
1
Redfern, A., Hunter, M., Law, and Practice of International Commercial Arbitration (4th Ed.) (Sweet &
Maxwell) at 317.
2
Schindler, P., Desai, S., Compulsory Consolidation: The next step in International Construction Arbitration
available at http://www.patrickschindler.com/pdf/compulsoryconsolidation (last visited May 20, 2023).
3
Belize Bank Limited v Belize [2018] UKPC 13, Para 10.
4
M. DOMKE, DOMKE ON COMMERCIAL ARBITRATION, § 1:01, at 1-2 (rev. ed. 1984).
5
Art. 10(1) of the ECT.
6
PSA, 16 July 2020, Clause 18.1.
7
PSA, 2020, Clause 18.2.
7|Page
3) To coordinate with the Transmission Licensee in effectively meeting the deliverables as
provided under Clause 3.8
4) To issue an advance invoice to the Buyer at the beginning of every Nepalese Financial
Year in relation to advance payment of 50% amount of the projected annual purchase order.9
5) To adjust the total amount payable at the end of every Nepalese Financial Year in relation
to deliverables actually transmitted to the Buyer throughout the year and the advance
received from the Buyer.10
6) To issue a final invoice one month prior to the end of every Nepalese Financial Year after
adjusting the amount payable for the total deliverables actually transmitted (including the
deliverables yet to be transmitted for the last month of the concerned Financial Year) to the
Buyer and the advance received from the Buyer.11
7) To pay 50% advance of the projected transmission cost to the Transmission Licensee at the
beginning of every Nepalese Financial Year.12
8)To fulfil all payment obligations to the Transmission Licensee within 15 days from the
issuance of invoices by the Transmission Licensee.13
Sweep clauses supplement detailed statements of work by obliging the supplier to perform:
(a) functions not specifically described in the statement of work or service descriptions
schedule but an inherent part of the services described in general terms, and (b) related
functions formerly performed by transferred staff, or with assets, budgets or other resources
transferred to the supplier. They are a catch-all intended to ensure that the supplier is obliged
to perform certain services even if they have not been included in the services description.14
The leading authority for this view is Chandris v Isbrandtsen-Moller Co Inc , The Court of
Appeal considered that general words in a post-nuptial settlement should not be constructed,
ejusdem generis, such that their meaning was restricted by the words that preceded them
unless there was something more in the deed to show that the words should be restricted in
this way. It was also a decision with which he said he entirely agreed. 15 More generally,
Devlin J (as he then was) considered that there was little justification for applying the
ejusdem generis in relation to commercial contracts. He pointed out that the main argument
that had justified the application of the ejusdem generis rule was that if general words are
given an unrestricted meaning, the enumerated items are surplusage. 16After a careful review
of authority, he pointed out that the presumption against surplusage and restricting the
meaning of general words had little value in ascertaining the intention of the parties to a
commercial contract.17
Parties who have entered into a contract freely and voluntarily are required to honour and
abide by its terms.18 Respondent failed to meet its obligation under clause 18.2 and 18.5 of
8
PSA, 2020, Clause 18.5.
9
PSA, 2020, Clause 18.6.
10
PSA, 2020, Clause 18.7.
11
PSA, 2020, Clause 18.8.
12
PSA, 2020, Clause 18.9.
13
PSA, 2020, Clause 18.10.
14
https://www.lexisnexis.co.uk/legal/guidance/what-is-a-sweep-clause-in-an-outsourcing-or-it-services-
agreement
15
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 at 244.
16
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 at 245
17
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 at 246
18
JSC VTB Bank v Skurikhin [2012] EWHC 1511 (Comm), [36] (Flaux J).
8|Page
the PSA agreement. Continued non-compliance of the respondent with the terms of
agreement has caused significant disruptions in the power supply to Bangladesh.
The failure to fulfil the supply obligations under PSA agreement has only exacerbated this
situation. Bangladesh has been experiencing a severe power shortage, resulting in widespread
inconvenience and hardship for our citizens. 19 The parties to a contract shall provide to each
other such facilities as may be needed to perform the contract from their respective sides.20 If
the contract cannot be performed due to the failure to provide such facilities, the party in
default of the performance shall not be held liable responsible.21 By unilaterally invoking the
situation as a force majeure event the claimant has seriously breached the contract by not
protecting sanctity of contract.
2. THE DOCTRINE OF PRIVITY OF CONTRACT PREVENTS CLAIMANT

FROM INCLUDING GPC INDIA AS A RESPONDENT.
Respondent signed a PTA to transmit surplus electricity from Nepal to India and other
countries for a consideration in February 2016.22 Respondent, GPC India, and the Claimant
entered into a PSA for the export of 60% of total generated electricity from the Project on 16
July 2020.23 The PTA agreement was signed way before the PSA agreement. Claimant isn’t
the party to the PTA hence doctrine of privity of contract applies to as it is not the party to the
PTA agreement. The principle of privity of contract is a fundamental principle of law which
requires that only parties to a contract are bound by its terms.24 Only those entities or persons
who are parties to the Contract may assert contractual rights under it.25
The doctrine of privity dictates ...that absent clear language indicating otherwise...a person
who is not a party to an agreement does not have any right against or liability for breach of
obligations there under.26 It is the PTA that determines obligation of parties to maintain the
ownership and control of transmission facilities within its jurisdiction. The transmission of
electricity under this Agreement is subject to the ownership and control requirements of the
transmission facilities within each Party's respective jurisdiction. 27 According to the
prevailing view in arbitral case law and doctrine, an arbitration agreement forms part of a
contract and therefore requires privity of contract between the parties to that agreement. 28
Each Contracting Party shall create and maintain in its territory a legal framework apt to
guarantee to investors the continuity of legal treatment, including the compliance, in good
faith, of all undertakings assumed with regard to each specific investor29
19
Claimant exhibit C 6, para 1.
20
Civil Code 2074, s 531(1).
21
Civil Code 2074, s 532(2).
22
Notice of Arbitration (Herein after NoA), para 5.
23
NOA, Para 8.
24
AES Summit Generation Limited and AES-Tisza Erömü Kft v. Hungary, ICSID Case No. ARB/07/22, para
274.
25
Occidental Petroleum Corporation and Occidental Exploration and Production Company v The Republic of
Ecuador, ICSID Case No. ARB/06/11, para 524.
26
Phoenix Action Ltd v Czech Republic, UNCITRAL PCA Case No AA280, para 242.
27
PTA, 10 February 2016, Clause 7.6.1.
28
Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan (ICSID Case No ARB/03/29),14
November 2005, para 180.
29
Salini v Jordan, Decision on Jurisdiction, 29 November 2004, para 126.
9|Page
A person who is not a party to a contract cannot sue on it. 30 not being a party to the
agreement, nor a party to the consideration given for it, has no right to sue upon it. 31 Only the
parties to contract can demand its performance:
(1) Only the person who is a party to a contract can demand the performance of the contract
by the other party.
(2) If two or more persons jointly enter into contract to do or not to do any act, all such a
person can jointly demand the performance of that contract, except as otherwise provided for
in the contract.32
To allow joinder or interest in would be akin to rewriting the contract and upsetting the
dispute resolution mechanism bargained for by the parties.33 Our law knows nothing of a jus
quaesitum tertio arising by way of contract. Such a right…cannot be conferred on a stranger
to a contract as a right to enforce the contract in personam.34 Each arbitration agreement in a
contract with privity stands alone, permitting parties to pursue remedies for breach. 35 Hence,
the claimant was not required to join GPC India as a respondent in the present arbitration.
3. LACK OF EVIDENCE CONNECTING GPC INDIA TO THE DISPUTE AS

PARTY OBLIGED TO RESUME SUPPLY OF ELECTRICITY
The dispute between the claimant and the respondent mainly relates to the alleged event of
force majeure and breach of the PSA. While the Claimant acknowledges that GPC India is a
shareholder in Respondent, there is a lack of substantial evidence connecting GPC India to
the specific issues raised in the dispute. Therefore, the Claimant submits that the joining of
GPC India as respondent is unnecessary because it will not help to resolve the issues. It
unnecessarily prolongs the proceedings and adds to the time and cost involved in this
arbitration.
A. RESPONDENT UNILATERALLY EXERCISED FORCE MAJEURE CLAUSE.
With unilaterally invoking the situation as a force majeure event the claimant has seriously
breached the contract by not protecting sanctity of contract. Respondent claimed that change
in law in India has created a situation of Force Majeure for the Respondent, as a result of
which the Respondent has been unable to supply electricity to the Claimant for the time
being.36 Respondent mentioned that this situation impacted the ability of the Respondents to
discharge its contractual obligations under the PSA.37 As claimed by response the issue
between two parties is non transmission of electricity. It is within the jurisdiction of GPC
India that alleged event of force majeure occurred. It is GPC India that should have exercised
30
Reid, Lord. " Beswick v Beswick." [1976] A.C. 114.
31
Tweddle v Atkinson, EWHC QB J57 (1861).
32
Civil Code 2074, s 530.
33
Multi-Party Arbitrations in the United States, in ARBITRATION AND THE LICENSING PROCESS 5-3, 5-
14 (Robert Goldscheider & Michel de Haas eds., 1984).
34
Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd [1915] AC 847, 853.
35
CMS Gas Transmission Co v Argentine Republic (ICSID Case No ARB/01/8) [2005] ILM 44, para 130.
36
Response to the NoA, Para 15.
37
Response to the NoA, Para 18.
10 | P a g e
change in law if this alleged event impacted in fulfilling obligations. Respondent unilateral
exercise of change in law in India doesn’t qualifies as a force majeure event.
Continued non-compliance of the respondent with the terms of agreement has caused
significant disruptions in the power supply to Bangladesh. Bangladesh has been experiencing
a severe power shortage, resulting in widespread inconvenience and hardship for our
citizens.38 The failure to fulfil the supply obligations under PSA agreement has only
exacerbated this situation. Despite repeated request from claimant requesting respondent to
take immediate action to remedy the situation and resume the supply of services without any
further delay. Respondent didn’t resume supply of electricity.
B. CHANGE IN LAW IN INDIA DOES NOT AFFECT RESPONDENT IN

FULFILING IT’S OBLIGATIONS.
Even if we accept jurisdiction requirement under the PTA, change in law in India doesn’t
qualifies as a force majeure event. GPC India has 50% ownership of RESPONDENT,
combined with its control over board of directors and its ability to select the members of that
board gives both substantial ownerships of and effective control over the Respondent. A
majority ownership interest in a corporation, especially when accompanied by control over
the corporation's board of directors, constitutes substantial ownership and effective control,
even if that control is not absolute.39 The Central Transmission Utility shall not authorize the
use of any Indian transmission lines by a foreign seller of electricity which is not
substantially owned or effectively controlled by Indian(s) or an Indian entity.40
GPC India being majority owner of respondent exercises control over it. Two out of five
Members of board of directors are directly appointed by GPC India. Even Independent
Director of H.H Nepal is Mr. Amit Bir Bikram Shah, who is retired KKR Global Executive
with over 30 years of experience. Mr. Rastra Premi Prasad was the first CEO of respondent
and was succeeded by Mr. Binod KKR in the year 2021. 41 Both being directly appointed
member of BOD by GPC India. When a majority of a company's board members are
beholden to a particular group, that group is considered to control the company, the law
dictates that control of a company's board of directors establishes control of the company
itself.42 H.H. Nepal being a substantially owned and effectively controlled by Indian(s) and an
Indian entity isn’t impacted by the amendment of laws in India to meet its supply
commitments to the Buyer in a timely manner. 43 The mere existence of common questions of
law or fact does not constitute a sufficient reason to intervene. 44 Hence, change in law in
India didn’t affect the respondent in fulfilling its obligation.
C. RESPONDENT ACTED IN BAD FAITH IN INVOKING FORCE MAJEURE.
38
Claimant exhibit C 6, Para 1.
39
American Telephone and Telegraph Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586 (9th Cir. 1996), para
15.
40
Electricity act-2003, s 38(3).
41
NoA, Para 4.
42
re Plains Resources Inc., No. 06-51593, 2008 WL 5991966 (Bankr. W.D. Tex. 2008), para 61.
43
PSA, 2020, Clause 18.2.
44
FED. R. Civ. P. 24(b).
11 | P a g e
One of the cornerstones of contract law, Pacta Sunt Servanda, referred as a sanctity of
contract, entails those obligations in terms of must be honoured because the contract was
entered into voluntarily. It, on the reference of contract law, implies that the clause and
provisions of contract must be abided, and agreement must be kept in a good faith. In giving
effect to this principle, the courts are required to recognize the sanctity of a contract and
therefore, they must strictly rely on the provisions of the contract when determining the
enforceability of the contract.45
The principle requires parties “to deal honestly and fairly with each other (…) and to refrain
from taking unfair advantage”.46 Unjustifiably breaking off the negotiations, creating
abnormal delays, disregarding the agreed procedures, or systematic refusal to take into
consideration adverse proposals or interests can amount to breaches of good faith. 47 Two
elements make up this obligation: the determination of the object to be performed in good
faith, as well as the manner in which the obligation is performed.48
Here respondent was required to fulfil its obligation under the PSA in the manner set forth in
it. But by unilaterally invoking force majeure clause without proper valid ground respondent
acted in bad faith. Bangladesh has been experiencing a severe power shortage, resulting in
widespread inconvenience and hardship. The failure to fulfil the supply obligations under this
agreement has only exacerbated this situation. Hence, respondent violated good faith
principle of contract law.
4. GPC INDIA DOES NOT FULFIL REQUIREMENTS UNDER SIAC NEITHER AS

JOINDER NOR AS CONSOLIDATOR.
Arbitration clause under the PSA doesn’t demonstrate any explicit requirement for joining
GPC India as a respondent in this present arbitration. If Respondent feels inclusion of GPC
India is must then under SIAC there are two ways through which a party can be joined to an
arbitration proceeding i.e. joinder and consolidation.
A. GPC INDIA DOES NOT FULFIL JOINDER REQUIREMENT UNDER SIAC.
SIAC under its rule 7 setups the joinder requirement for a party to arbitration. Prior to the
constitution of the Tribunal, a party or non-party to the arbitration may file an application
with the Registrar for one or more additional parties to be joined in an arbitration pending
under these Rules as a Claimant or a Respondent, provided that any of the following criteria
is satisfied:49
a. the additional party to be joined is prima facie bound by the arbitration agreement;
45
Hutchison (ED), Pretorius C(ED), Naude T et al (2017), “The Law of Contract”, Third Edition. South Afrca:
Oxford University Press Southern Africa (Pty) Limited.
46
Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian
Republic of Venezuela, ICSID Case No. ARB/07/27,2010, para.169-170.
47
Lac Lanoux Arbitration (France v Spain) (Award) [1957] XII RIAA 281.
48
Olivier Corten and Pierre Klein (eds.), Les Conventions de Vienne sur le droit des traités: Commentaire, 2006
Art 26 para 36.
49
SIAC Rules (6th edn, 2016) r 7.1.
12 | P a g e
b. all parties, including the additional party to be joined, have consented to the joinder of the
additional party. The decision whether or not to consolidate two or more arbitrations, or to
permit joinder or intervention, is an issue that involves issues of case management and
procedural efficiency and fairness that are quintessentially (sic) for arbitral resolution.50
The parties’ consent represents a vital element for the joinder of third persons in pending
arbitral proceedings.51 Joinder may also occur when, at a later stage of the proceedings, the
claimant decides that a third party should become an additional respondent.52
It has been held in multiple arbitration that consent of all parties is must for joinder. A basic
requirement for any joinder is the consent of all parties concerned, both the original disputing
parties and the third party whose joinder is requested. 53 A necessary condition for joinder is
that the parties to be joined consent to such joinder...[we find] no such consent in the present
case.54 The nature of arbitration is such that it thrives on the consent of the parties to it for its
validity.55 GPC India neither has consented to the arbitration nor is aware of the arbitration
proceedings.
Joinder may also occur when, at a later stage of the proceedings, the claimant decides that a
third party should become an additional respondent.56 A request for joinder or consolidation
should not be granted if it would result in a significant delay of the proceedings or prejudice
the rights of any party to the arbitration. 57 The execution of the joinder is left to the discretion
of the arbitral tribunal and further review of the decision by the national courts. 58 When GPC
India suffices all the requirements set forth in SIAC and domestic laws, it can be joined as a
party to this arbitration.
B. PRESENT ISSUE DOES NOT FULFIL CONSOLIDATION REQUIREMENT
UNDER SIAC.
Prior to the constitution of any Tribunal in the arbitrations sought to be consolidated, a party
may file an application with the Registrar to consolidate two or more arbitrations pending
under these Rules into a single arbitration, provided that any of the following criteria is
satisfied in respect of the arbitrations to be consolidated 59: a. all parties have agreed to the
consolidation; b. all the claims in the arbitrations are made under the same arbitration
agreement; or c. the arbitration agreements are compatible, and: (i) the disputes arise out of
the same legal relationship(s); (ii) the disputes arise out of contracts consisting of a principal
contract and its ancillary contract(s); or (iii) the disputes arise out of the same transaction or
50
Born 2009: Gary B. Born: International Commercial Arbitration. The Hague, 2009, Kluwer Law International.
p. 2091.
51
cf. Engineer case; Choi, p. 33; Lew/Mistelis/Kröll, §16-40.
52
Voser & Schellenberg 2009, p. 346.
53
CDC v. Seychelles (ICSID Case No. ARB/02/14), para. 41.
54
Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of
Ecuador (ICSID Case No. ARB/06/11), para. 99.
55
Gerasimtchuk, E., Multi-party Arbitration available at www.uni.kiel.de/eastlaw/ws0102/semarbeiten (last
visited May 27, 2023).
56
Voser & Schellenberg 2009, p. 346.
57
Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Decision on Jurisdiction (Jan. 25, 2000)
https://www.italaw.com/sites/default/files/case-documents/ita0136.pdf. para 121.
58
Gary Born, Parties to International Arbitration Agreements, in International Commercial Arbitration 1525
(Gary Born 3 ed. 2021).
59
SIAC Rules (6th edn, 2016) r 8.
13 | P a g e
series of transactions. Respondent hasn’t started any arbitration proceeding to solve its
problems with GPC India in relation to disputes arising out of the PTA.
Consolidated proceedings are invariably longer and more complex than non-consolidated
proceedings.60 Neither the American Arbitration Association (AAA), the International
Chamber of Commerce (ICC), nor the London Court of International Arbitration (LCIA)
permits arbitrators to consolidate arbitrations over the objection of the parties.61 In arbitration,
‘consolidation’ refers to the act or process of uniting into one case several independent
proceedings that are pending or have been initiated. 62 So in this present arbitration issues
between GPC India and RESPONDENT doesn’t meet consolidation requirement under
SIAC. Hence, issue between GPC India and respondent should be left out of this arbitration.
C. PRESENT SCENARIO DOES NOT SATISFIES MULTIPLE CONTRACT

REQUIREMENT UNDER SIAC.
SIAC under its clause 6 mentions provision related to multiple contracts. Where there are
disputes arising out of or in connection with more than one contract, the Claimant may: 63 a.
file a Notice of Arbitration in respect of each arbitration agreement invoked and concurrently
submit an application to consolidate the arbitrations pursuant to Rule 8.1; or b. file a single
Notice of Arbitration in respect of all the arbitration agreements invoked which shall include
a statement identifying each contract and arbitration agreement invoked and a description of
how the applicable criteria under Rule 8.1 are satisfied. The Claimant shall be deemed to
have commenced multiple arbitrations, one in respect of each arbitration agreement invoked,
and the Notice of Arbitration under this Rule 6.1(b) shall be deemed to be an application to
consolidate all such arbitrations pursuant to Rule 8.1. According to Voser, cross-claims are
often a claim in guarantee or in damages; for example, a claim by a sub-contractor against
another sub-contractor when the main contractor has started an arbitration proceeding against
both.64 The claimant isn’t the party to the PTA so, the claimant cannot exercise multiple
contract rule under SIAC. Therefore, it is our respectful submission that claimant wasn’t
required to join GPC India as a party to present arbitration.
60
Karl-Heinz Bockstiegel, The Role of Party Autonomy in International Arbitration, DISP. RES. J., Summer
1997, at 343.
61
Matthew D. Schwartz, Note, Multiparty Disputes and Consolidated Arbitrations: An Oxymoron or the
Solution to a Continuing DilemmaP, 22 CASE W. RES. J. INTL L. at 345-46 (1990).
62
Pair & Frankenstein 2011: Lara M. Pair and Paul Frankenstein. "New ICC Rule on Consolidation: Progress Or
Change, The." Emory Int'L L.Rev. 25, 2011: p. 1061.
63
SIAC Rules (6th edn, 2016) r 6.
64
Voser & Schellenberg 2009: Nathalie Voser and Wittmer Schellenberg "Multi-Party Disputes and Joinder of
Third Parties." In 50 Years of the New York Convention: ICCA International Arbitration Conference, edited by
Van den Berg, Albert Jan. VOL 14 ed.,343. Dublin, 2009 ICCA Congress Series 2009 ,p. 358.
14 | P a g e
MAJEURE THAT PREVENETED THE RESPONDENT FROM DISCHARGING ITS
OBLIGATIONS UNDER POWER SALES AGREEMENT DATED 16 JULY 2020?
1. THERE WAS A SITUATION OF HARDSHIP
Hardship as defined by ICC Force Majeure & Hardship clause as, ‘A party to a contract is
bound to perform its contractual duties even if events have rendered performance more
onerous than could reasonably have been anticipated at the time of the conclusion of the
contract.’65 A hardship clause can be described as a term of a contract under which the
contract can be reviewed if a change in circumstances occurs that fundamentally modifies the
initial balance between the obligations of the parties, so that performance, though not
impossible, becomes unusually onerous for one party.66
The section of the UNIDROIT Principles dealing with hardship begins by stating a general
principle that a party remains bound to perform its contractual obligations even when the
performance of the contract becomes more “onerous” for it, subject to the more specific
provisions on hardship.67 The principles then go on to define the ‘hardship’ as There is
hardship where the occurrence of events fundamentally alters the equilibrium of the contract
either because the cost of a party’s performance has increased or because the value of the
performance a party receives has diminished, and
(a) the events occur or become known to the disadvantaged party after the conclusion of the
contract;
(b) the events could not reasonably have been taken into account by the disadvantaged party
at the time of the conclusion of the contract;
(c) the events are beyond the control of the disadvantaged party; and
(d) the risk of events was not assumed by the disadvantaged party.68
The same definition has been embedded on the contract between claimant and respondent.
The term “Force Majeure Event”, as used in this Agreement, shall, subject to Clause 21.2,
mean any event, circumstance or combination of events or circumstances beyond the
reasonable control of, and without the fault or negligence of, a Party occurring on or after the
date of this Agreement that materially and adversely affects the performance by that Party of
its obligations under or pursuant to this Agreement, […...]69.
Hardship refers to a change in economic circumstances which prevents no party from
fulfilling its contractual obligations but makes performance of the whole contract much less
65
ICC HARDSHIP CLAUSES MARCH 2020, Para.1
66
Hardship, Impracticability, Unconscionability, Unforeseeability in: Legal Effects of Fluctuating Exchange
Rates (imf. org) s
67
UNIDROIT Principles, Art. 6.2.1 (Contract to be observed).
68
UNIDROIT Principles, Art. 6.2.2 (Definition of Hardship).
69
PSA, Clause 21.1.1.
15 | P a g e
profitable for this party – or even costly for this party, with the latter actually losing money
because of the contract.70
Force majeure is not a concept defined in an identical way under every jurisdiction; therefore,
each party’s force majeure clause within its contracts is of importance when dealing with
these particular claims71 Force majeure is a provision in a contract that frees both parties from
obligation if an extraordinary event directly prevents one or both parties from performing. A
non-performing party may use a force majeure clause as excuse for non-performance for
circumstances beyond the party's control and not due to any fault or negligence by the non-
performing party. However, mere impracticality or unanticipated difficulty is not enough to
excuse performance. Force majeure clauses are, as a general matter, drafted to protect a
contracting party from the consequences of adverse events beyond that party’s control.
Application of a force majeure provision, as with any other contractual provision, starts with
the words chosen by the drafters72.
Respondent cannot receive the benefit of hardship because of the respondent's inability to
lessen the circumstances, dependent on third parties, and ongoing communication with the
claimant. This rule expresses the principle that a party who is required to act must take all
reasonable steps to fulfil that duty and may not wait for circumstances that might ultimately
excuse his non-performance. According to this rule, a party may also be obligated to perform
by offering what, in all the circumstances of the transaction, is a commercially fair
replacement for the performance that was mandated under the contract. The failure of a
contract's intended outcome causes a party to temporarily suspend performance but does not
release them from their obligations, as in the case of Respondent.
2. THE RESPONDENT IS REQUIRED TO FULFIL PROCEDURE PURSUANT TO

CLAUSE 21.1.2 OF CONTRACT:
In relation to clause 21.1.2 of contract, subject to effect of hardship, at first stage a party has
to fulfil pre-condition for operation of event of hardship. Thereafter at second stage, the
establishment of hardship entitles a disadvantaged party to renegotiate on the original terms
of contract with a view to adapting them in a changed circumstance. And such request must
be made without undue delay notifying the reasonable ground for the request of
renegotiation.
However, such request does not entitle disadvantaged party to withhold the performance. The
third stage, if the parties fail on re-negotiation can enter into court proceeding to regard or
disregard situation of hardship. Upon the facts, the court either terminates the contract or
adapts the contract with a view to restoring its equilibrium. Its obligatory ADR aspect,
namely that of a compulsory renegotiation by the contracting parties seems also to be well
adapted to the current circumstances of change in law, rather than simply a flood of
commercial litigation.73
70
https://academic.oup.com/ulr/article/25/4/437/6055096 (last visited: March 22, 2023).
71
United States vs. Panhandle Eastern Corp., 693 F. Supp. 88, 95 (D. Del. 1988).
72
Wilmington Firefighters Ass’n v. City of Wilmington, 2002 WL 418032, at Para. 10.
73
See the call of a number of senior retired judges and academics to look to creative legal solutions including
ADR: https://www.biicl.org/ breathing-space.
16 | P a g e
A. "INABILITY TO CONFER UPON THE RESPONDENT THE BENEFIT OF
EXEMPTION FROM CONTRACTUAL OBLIGATION"
Exemption clause has been defined as a clause in a contract that exempts one party
from liability for something.74 It is common for certain kinds of contract to include clauses
which seek to exclude or limit liability. Equally, businesses may seek similarly to exclude or
limit liability by disclaimer notices in reports, valuations or the like. Parties may want to
protect themselves from paying out damages in the event of a breach of contract or in the
case of negligence, or limit the amount they have to pay. Some exclusion provisions will seek
to exclude a party’s liability altogether; others will seek to put a limit on liability. In the case
of a contractual exclusion clause, the relevant provision must properly form part of the
contract. Whether a clause in a contract, or a disclaimer, the provision must also be fairly
brought to the attention of the innocent party, cover the particular circumstances that have
occurred and not be undermined by any misrepresentation on the part of the party seeking to
rely on the provision.75
In a contract, both parties will exchange an item or service of value, but certain expectations
must be met in order for the exchange to be properly completed. Such expectations will be
defined by the terms of the contract. Failure to meet these expectations by either party will in
most cases mean a breach of contract, which may result in damages being awarded to the
non-breaching party. Thus, one’s contractual obligations must be given great consideration.
The purpose of exemption clause is to benefit affected party but shall not be introduced as a
mitigatory measure to gain unreasonable and unusual benefit.76
For a contract to be eligible to be non-performed following circumstances are guided by
Muluki Civil Code 2074:
Circumstances where a contract needs not be performed: In any of the following
circumstances, it is not necessary to perform any act under, or perform, a contract: 77
(a) If either party to a contract waives the other party from fulfilling the obligation under the
contract,
(b) If a voidable contract is voided by the party entitled to do so,
(c) If the contract cannot be performed for the reason of its breach by the other party,
(d) If it is not necessary to perform the act under the contract by operation of any provision of
this Part,
(e) If a contract which is unenforceable according to Section 531.
Claimant is in denial of any default of the circumstances as mentioned above so benefit to be
exempted from the contractual obligation cannot be conferred upon the respondent. Claimant
has thoroughly followed the Pacta Sunt Servenda and have maintained the sanctity as well as
purity of the contract by fulfilling its required payment obligation in advance.
74
https://www.collinsdictionary.com/dictionary/english/exemption-clause (last visited: June 20, 2023.)
75
https://www.lewissilkin.com/en/insights/will-a-court-force-a-party-to-perform-its-contractual-obligations (last
visited: June 7, 2023).
76
Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12.
77
Civil Code 2074, s.527.
17 | P a g e
B. "NON-COMPLIANCE WITH FORCE MAJEURE PREREQUISITES BY THE
RESPONDENT AS GROUNDS FOR DENYING THE BENEFIT"
Force majeure clauses vary according to their:

(1) definition of “force majeure,” such as specifying a list of qualifying events;
(2) causal-nexus requirements, such as requiring that the force majeure event caused the
failure to perform, prevented or hindered compliance, or delayed or interrupted operations;
(3) remedial-action requirements, such as requiring due diligence or reasonable efforts to
overcome or mitigate the force majeure event’s effects, to remove the force majeure event, or
both;
(4) notice requirements; and
(5) grace periods excusing or delaying contractual performance.78
The parties to contract are free to choose their adequate force majeure requirements or event
as they agreed upon to and also contain the privilege to exempt certain condition from the
force-majeure event rendered according to the nature and terms of the contract.
I. LACK OF EXERCISE OF MITIGATORY MEASURES BY THE RESPONDENT

AS A FAILURE TO ALLEVIATE HARDSHIP
In order to obtain relief under a force majeure provision, a party will have to demonstrate the
event falls within the clause and the operative parts of the clause are satisfied. Typically, the
operative parts of the clause include an obligation to mitigate the effects of the force
majeure event. The lengths a party has to go to in order to satisfy the mitigation obligations
depends on the contract wording.
One example of where English courts was willing to imply a reasonable obligation to
mitigate the effects of a force majeure event is the English High Court Case Classic
Maritime v Limbungan Makmur Sdn Bhd. In that case, a dam close to an iron ore mine burst
and, as a result, Limbungan was unable to supply the required amount of iron ore under its
contract with Classic. Limbungan claimed the burst was an event of force majeure. The force
majeure provision did not contain any express mitigation obligations. Even so, the English
High Court found that Limbungan was obliged to take reasonable steps to mitigate. Such
steps included seeking to source iron ore from another location or another supplier to fulfil
the contract.
Clause 21.3.2 provides the requirements to be fulfiled in order to get the benefit of the force-
majeure event.
The provisions of Clause 21.3.1 shall apply provided that:
i) the suspension of performance is of no greater scope and of no longer duration than is
required by the Force Majeure Event;
78
Point Energy Partners Permian, LLC v. MRC Permian Co. Supreme Court of Texas (sNo. 21-0461).
18 | P a g e
ii) the affected Party proceeds with reasonable diligence to remedy its inability to perform its
obligations under this Agreement and provides weekly progress reports to the non-affected
Party describing actions taken to end the Force Majeure Event or overcome and mitigate its
effects;
iii) the affected Party shall have the burden of proving that the circumstance, event or
combination of circumstances or events constitutes a valid Force Majeure Event and that it
has exercised reasonable diligence and efforts to avoid the effects of any alleged Force
Majeure Event;
iv) the affected Party provides the non-affected Party (at the sole cost and risk of the non-
affected Party) reasonable facilities for obtaining further information about the Force Majeure
Event, including the inspection of any relevant facility; and
v) when the affected Party anticipates that it is able to resume performance of its obligations
under this Agreement, that Party shall give the non-affected Party notice to that effect as soon
as possible.
(b) The affected Party shall give the non-affected Party notice, as soon as is reasonably
practicable after it has occurred (but in any event no later than 5 Business Days after it has
occurred), of the Force Majeure Event and as soon as is reasonably practicable give further
notice containing information adequate to justify the claim and advise the steps and time
necessary to overcome such Force Majeure Event.
(c) The affected Party shall use its reasonable endeavours to:
(i) mitigate and/or overcome the effects of any of Force Majeure Event, including by recourse
to mutually acceptable (which acceptance shall not be unreasonably withheld or delayed by
either Party) alternative sources of services, equipment and material, and construction
equipment; and
(ii) ensure resumption of normal performance of this Agreement as soon as reasonably
practicable.
The implication and exercise of the clause is dependent upon the fulfilment of steps and
endeavours or measures mentioned therein. The non-fulfilment of one mitigatory or
beneficial step leads a party to an exemption from getting the benefit and onus of the force-
majeure event. Respondent has fulfilled the obligation of informing about the event and
hindrance caused by it as per the clause 21.3.2(b) but the subsequent clause to be rendered
possible for implication and construction requires the mandatory step of former. Clause
21.3.2 clearly states the requirements which are not duly fulfilled by the respondent.
As a general principle, the party seeking to assert a force majeure defence must demonstrate
that it could not have avoided the contractual breach or, alternatively, that it took reasonable
steps to mitigate its damages. Any business seeking to rely on a force majeure defence
should, therefore, take immediate efforts to limit the impact of supply chain disruptions,
shipping delays and labour shortages. As one court noted, a party “cannot put its head in the
sand and then scream Act of God when a storm comes.79
79
TGI Office Automation v. Nat’l Elec. Transit Corp., No. 13-CV-3404, 5-6, 51 (E.D.N.Y. Sept. 14, 2015).
19 | P a g e
The affected Party proceeds with reasonable diligence to remedy its inability to perform its
effects;80. But as soon as the bill was passed on 20th march the respondent halted the supply
of electricity owing the reason of unforeseeable circumstances and wrote an email dated 22nd
March as presented in claimant Exhibit C4. This clearly intends that respondent didn’t
institute any reasonable and mitigatory measure for the remedy of the situation and to
maintain and prevent the sanctity of the contract.
II. ABSENCE OF DUE DILIGENCE, PRUDENT CARE, AND NEGOTIATION
When a force majeure event occurs, the claiming party has an obligation to act with
reasonable care and diligence to minimize the effects and fulfil its contractual obligations to
the extent possible.81 Clause 21.3.2 a(ii) clearly mentions that the affected Party proceeds
with reasonable diligence to remedy its inability to perform its obligations under this
Agreement and provides weekly progress reports to the non-affected Party describing actions
taken to end the Force Majeure Event or overcome and mitigate its effects.
The respondent has failed to showcase any sort of reasonable and diligence care which were
executed in the course of alleviating the situation of force majeure. The strict provision of
weekly progress report also has been missing from the respondent side. As mentioned
previously the claimant didn’t receive more than one email and communication regarding the
event of force-majeure and though mentioned about the verified call records from the
respondent there isn’t any presence of so in the exhibit itself.
The PTA agreement signed between the Respondent and GPC India holds special recognition
in this context. The PTA agreement was solely responsible and mandatory instrument for the
supply of electricity by Respondent outside its territory. The CEO of Respondent was Mr.
Rastra Premi Prasad in signing of the PTA in 2016 as well as in PSA agreement dated July
16, 2020. Mr. Prasad worked as former Secretary of Ministry of Electricity, Government of
India this also indicates his involvement and association with the ministry of electricity in
certain point of time.
Respondent’s 50% ownership is vested in GPC India which is a major state owned company.
GPC India being a transmission licensee can’t be denied to have association with the Ministry
of Electricity. The mutual benefit of PTA and PSA agreement was received by both
Respondent and GPC India. Clause 7.3 also mentions and supports the statement in this
regard where it is mentioned that transmission licensee shall charge the seller a commission
of 10% on the above rate. So, these circumstances and factual connection are insisting and
weightful enough to held that respondent had enough chances of negotiation for the
resumption of transmission lines with GPC India.
PSA, Clause 21.3.2 (ii).

80
Interocean Oil Development Company v. Nigerian National Petroleum Corporation (ICSID Case No.
81
ARB/13/20).
20 | P a g e
3. AMENDMENT IN ACTS CONFERRS AS AN EXCEPTION OF FORCE
MAJEURE
It is asserted that defendant ‘s claim of change in law in India (Electricity Act, 2023) situation
proves to be exception of force majeure. Claimant requests the defendant to provide
substantial evidence demonstrating the direct and unavailable impact of the change in law as
a Force Majeure Event. Claimant challenges the sufficiency of the evidence provided by the
defendant and request additional documentation or expert opinion to support their claims.
While it is acknowledged that the transmission of electricity is subject to ownership and
control requirements it doesn’t automatically imply that any change in law affecting
ownership or control constitutes a Force Majeure Event. The specific circumstances and
criteria for Force Majeure events need to be examined in accordance with the terms of PSA.
It should be noted that compliance with laws and regulations is a standard requirement for
both parties, and it doesn’t absolve the respondent from its obligation under the PSA.
A. LACK OF PREREQUISITES FOR ACTIVATION OF LEGAL IMPRACTIBILITY

IN BEHALF OF RESPONDENT
A contract is legally impracticable when performance would cause extreme and unreasonable
difficulty, legal abidingness or loss to one of the parties.” 82 English laws seems to reject any
notion of relief for changed circumstances that do not amount to impossibility. 83 Generally, in
order to prevail on a defence of commercial impracticability, a party must show the
following:84
(i) a supervening event, either an 'act of God' or an act of a third party, made
performance impracticable,
(ii) the non-occurrence of the event was a basic assumption upon which the contract was
based;
(iii) the occurrence of the event was not the party's fault; and
(iv) the party did not assume the risk of the event's occurrence.”
The Supreme Court of India had refused to grant 'Force Majeure' exemption to a Adani, who
claimed change of law in Indonesian law affecting coal supply or prices would not amount of
“Change of law” for PPA purpose85.
82
Raytheon Co. v. White, 305 F.3d 1354, 1367 (Fed. Cir. 2002).
83
Ingeborg Schwenzer, Force Majeure and hardship in international sales contracts, (2008) 39 VUWLR.
84
Energy Watchdog v.Electricty Regulatory Comm and Ors (2017).
85
Hutchison (ED), Pretorius C(ED), Naude T et al (2017), “The Law of Contract”, Third Edition. South Afrca:
Oxford University Press Southern Africa (Pty) Limited.
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It is fact to be considered that the change in law of third party’s nation impracticability
constitutes hardship situation than the force majeure.
B. THE SITUATION PROVES TO BE EXCEPTION OF FORCE MAJEURE
Considering force majeure as an event of fundamental changes in circumstances as specified

in section 531(1) of Muluki Civil Code, 2074, the same section has also enumerated the
exception for the constitution of force majeure in 531(3) which reads:
(3) Notwithstanding anything contained in sub-section (2), none of the following
circumstances shall be deemed to constitute a fundamental change in the circumstance
existed at the time of conclusion of a contract:
(a) If the performance of the contract has become difficult,
(b) If the performance of the contract results in less profit or in loss,
(c) If any party to the contract is dependent upon any third party who is not a party to the
contract for its performance, and the third party makes a default or becomes incompetent,
(d) In the event of a strike or lockout,
(e) If additional tax, fee or other revenue is required to be paid,
(f) If a contract is concluded with more than one object and some of the objects cannot be
fulfilled.
In relation to the contract, the change in law had made the performance of contract as
difficult and onerous resulting delay and halt in transmission of electricity. Moreover, the
respondent is dependent upon the third party i.e., GPC India for the transmission of electricity
which were not able to execute due to change in laws for the foreigners. Change in law of
third party would not amount to Force Majeure Event. Thus, form the aforementioned
deductive reasoning the situation could be constituted as an exception of force majeure.
4. THE RESPONDENT HAS FAILED TO FULFIL ITS CONTRACTUAL

OBLIGATIONS UNDER PSA
It is asserted that first, respondent is entitled to ensure sanctity of contract and second,
respondent has failed to duty to mitigate, provide reasonable endeavour and regular and
updated communication with the claimant. A force majeure clause allocates the risk of loss if
performance is hindered, delayed, or prevented because of an event that the parties could not
have anticipated or controlled. It provides a contractual defence, the scope and effect of
which will depend on the express terms of a particular contract. These terms may have been
negotiated, if the parties took the time to tailor the clause to their specific transaction, but
22 | P a g e
they often are boilerplate.86 The event so rendered and the defence against such just can’t be
conferred without the use of any mitigatory measures and compliances.
A. THE RESPONDENT IS ENTITLED TO ENSURE THE PRINCIPLE OF

SANCTITY OF CONTRACT
One of the cornerstones of contract law, Pacta Sunt Servanda87, referred as sanctity of
contract, entails those obligations in terms of must be honoured because the contract was
entered into voluntarily. It, on the reference of contract law, implies that the clause and
provisions of contract must be abided, and agreement must be kept in a good faith.
In giving effect to this principle, the courts are required to recognize the sanctity of a contract
and therefore, they must strictly rely on the provisions of the contract when determining the
enforceability of the contract.88
Since the claimant has entered into a contractual agreement with respondent with simplifying
clause that the construction work to be met within following milestone years, however the
Mala fide intention of respondent, breach of contract can be identified from the unresponsive
nature of replying to emails. With unilaterally invoking the situation as a force majeure event
the defendant has seriously breached the contract by not protecting sanctity of contract. The
parties have thereof mentioned event of hardship in clause 21.1 as compliance with ongoing
situation, thus are obliged to ensure sanctity of contract.
B. THE RESPONDENT HAS FAILED TO COMPLY WITH DUTY TO MITIGATE

THE UNFAVOURABLE SITUATION,
A party that unreasonably fails to mitigate their losses reduces the quantum of damages to the
extent that mitigation would have avoided the loss.89 In Channel Island Ferries Ltd v Sea link
United Kingdom Ltd90, the court established that a party wanting to rely on force majeure
“must not only bring himself within the clause but must show that he has taken all reasonable
steps to avoid its operation or mitigate its results.”
In the Canadian case91, the Canadian Federal Court of Appeal stated:
“It is well established that a party who suffers damages as a result of a breach of contract has
a duty to mitigate those damages, that is to say that the wrongdoer cannot be called upon to
86
https://www.americanbar.org/groups/litigation/committees/commercial-business/boilerplate-contracts/force-
majeure-clauses-contracts-covid-19/ (last visited: June 3, 2023).
87
VCLT, 1969, Art.26(1).
88
What is your duty to mitigate in a construction claim? (tungsten-capital.com) (last visited: June 3, 2023).
89
Andros Springs v. World Beauty, [1970] P. 144 (C.A.), at p. 154 (per Lord Denning).
90
16[1988] 1 Lloyd's Rep. 323 (10 December 1987) (1993), 163 N.R. 161 (FCA).
91
Redpath Industries Ltd. v. Cisco 16.
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pay for avoidable losses which would result in an increase in the quantum of damages
payable to the injured party.”
C. RESPONDENT CAN’T INVOKE THE FORCE MAJEURE PROVISIONS TO

ESCAPE LIABILITY.
In this case, respondent cannot meet its burden to show that the events that led to non-
performance were unforeseeable. The lack of foreseeability is an element of Force Majeure
that the respondent must demonstrate. If the lack of foreseeability element is not met, then the
respondent cannot be relieved of its contractual obligations or escape liability92.
There is presumption that business, such as those that entered into this contract are
sophisticated and highly educated men who are highly trained in International transactions 93.
The foreseeability element is a case-specific inquiry, and it requires the tribunals to evaluate
it in terms of what would a reasonable businessman in the same situation would have
foreseen94.
Respondent is a well-regarded participant in this market knew or should have known of the
possibility of the amendment that was purposely done thus, the change in amendment in
Electricity Act, 2003 was not unforeseeable. Further, respondent could have reasonably
avoided or overcome the effects of the impediment.
The respondent has had the PTA agreement with the claimant in regard for the supply of
electricity from the jurisdiction of respondents to other countries. The GPC India has been
demarcated as central transmission utility and is also a major state owned company under the
laws of India. So, the central utility with every due had the right and reasonable ground to
know about the amendment and to confer the same to the respondent and respondent also had
enough time to seek measurable information in regard to the event which it failed to do.
5. THE RESPONDENT HAS NO LEGAL RIGHT FOR TERMINATION OF

CONTACT
It is asserted that first, the notice of force majeure is prima facie invalid and second,
respondent has wrongfully terminated the contract. Alongside the right to invoke the contract
it is equally important is the need to focus on keeping the lines of communication open and
trying to find solutions and acceptable responses to enquiries.95 The facts may be exclusively
in the control of the affected party and difficult for the other party to ascertain. Some notice
provisions require regular updates by the affected party, including as to for how long
92
Craig, Park, Paulsson, International Chamber of Commerce Arbitration, Oceana Publications (2000), at 655.
93
Craig 655, ICC Award No.2216, Clunet 1975, at 917 et seq.
94
Brunner, 159, ICC No. 1703.
95
https://www.tamimi.com/news/coronavirus-can-we-rely-on-force-majeure-to-terminate-contractual-
agreements/ (last visited: June 3, 2023).
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performance is expected to be affected. If those estimates of duration are not genuine, the
affected party runs the risk of being in breach of the notice provisions and of its entitlement
to rely on the force majeure clause.96
The Force Majeure may be clear and evident and easily applied to certain cases whilst other
cases can be much harder to argue. It is critical that each case is considered independently of
others, taking into account its own and current circumstances, facts, business and sector.
Changes to situations are occurring on a daily basis and these changes will also have an
impact whether Force Majeure can be argued or not.97
A. THE NOTICE OF FORCE MAJUERE BY RESPONDENT IS PRIMA FAICE

INVALID
The claimant by stepping in clause 21.1 of contract has terminated the contract on the basis of
prolonged force majeure. The notice of force majeure of claimant itself seems prima facie
default since clause 21.3.2 of contract requires the affected party to give a notice to other
party of such force majeure event within 5 days after the affected party became aware. But,
on the contrary, considering proposal for change in law in Electricity Act, 2003 was done on
March 05, 2023, as a date when respondent knew this effect, from the aforementioned date to
date of notice of force majeure i.e. March 21, 2023, the date, the respondent has informed the
claimant after 16 days i.e., by exceeding 11 days.
B. RESPONDENT UNANIMOUSLY TRIED TO SEEK THE MEASURES FOR

AVOIDANCE OF LIABILITY.
Respondent also seek to avoid liability by claiming that claimant failed to mitigate damages
but in fact it is respondent who prevented claimant from doing so. Even assuming that
respondent is allowed to invoke the Force Majeure clauses stipulated in the contract,
respondent failed to mitigate the effects of the impediment. 98 This is consistent with the
principle of good faith and the responsibility if the parties to abide by the terms of the
contract.99 Under the Force Majeure provisions, once respondent becomes aware of an
impediment respondent must notify claimant of its inability to continue with the performance
of the contract.100
This allows for claimant to take necessary steps to mitigate its damages. The tribunals should
not reduce the damages that a claimant is entitled to when respondent was prevented from
mitigating its damages due to a lack of notification from respondent. 101 The lack of
96
https://www.squirepattonboggs.com/-/media/files/insights/publications/2020/04/when-force-majeure-ends-or-
does-not/whenforcemajeureendsordoesnot.pdf (last visited: June 3, 2023).
97
Ibid at 90.
98
ICC Force Majeure, Art 7.
99
Craig, Park, Paulsson, International Chamber of Commerce Arbitration, Oceana Publications (2000), at 657.
100
Craig at 657.
101
ICC Award No. 3880, YCA 1985, at 44 et seq. (also published in: Clunet 1983, at 897 et seq.).
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notification reasonably led claimant to believe that, albeit a delay, respondent would perform
its contractual obligations. In this case respondent actions prevented claimant from mitigating
damages.

DATED 16 JULY 2020?
1. THE SITUATION OF HARDSHIP EXISTED.
A hardship clause is a provision in a contract that provides for the contract to be changed
when circumstances have changed and one of the contracted parties is unduly burdened 102.
Hardship clauses are included in contracts to help keep the obligations of the listed parties
balanced. If circumstances change and one party is now unequally obligated, a hardship
clause allows the terms of the contracts to be changed.
Hardship clauses are most frequently included in international commerce agreements. Their
purpose is to make sure that the contract continues when one party's circumstance has been
altered and they are no longer able to meet their contractual obligations. Hardship as defined
by ICC Force Majeure & Hardship clause as, ‘A party to a contract is bound to perform its
contractual duties even if events have rendered performance more onerous than could
reasonably have been anticipated at the time of the conclusion of the contract.’ 103 A hardship
clause can be described as a term of a contract under which the contract can be reviewed if a
change in circumstances occurs that fundamentally modifies the initial balance between the
obligations of the parties, so that performance, though not impossible, becomes unusually
onerous for one party.104
The term “Force Majeure Event” as used in this Agreement, shall, subject to clause 21.2
mean any event, circumstance or combination of events or circumstances beyond the
reasonable control of and without the fault or negligence of, a party occurring on or after the
date of this agreement that materially or adversely affects the performance by that Party of its
obligations under or pursuant to this Agreement, provided that such material and adverse
effect could not have been prevented, overcome or remedied in whole or in part by the
affected Party through the exercise of diligence and reasonable care.105
In terms of a contract, hardship means that the balance between two contracted parties has
been altered. For instance, the costs that one party must cover to meet their obligations may
have increased. There are several other requirements that must exist for hardship to occur:
1. The change in circumstances was only revealed after the burdened party entered the
contract.
102
ICC HARDSHIP CLAUSES MARCH 2020, Para.1.
103
Hardship, Impracticability, Unconscionability, Unforeseeability in: Legal Effects of Fluctuating Exchange
Rates (imf.org)s.
104
PSA, Clause 21.1.1.
105
http://eurojuris-itl.net/docs/Hardship-clause-2016.pdf (last visited: June 3, 2023).
26 | P a g e
2. There would have been no way for the burdened party to anticipate this change when
entering the contract.
3. The changes in circumstance cannot be controlled by the burdened party.
4. The burdened party did not assume the risk of the changes.
Hardship refers to a change in economic circumstances which prevents no party from
fulfilling its contractual obligations but makes performance of the whole contract much less
profitable for this party – or even costly for this party, with the latter actually losing money
because of the contract.106
Force majeure is not a concept defined in an identical way under every jurisdiction; therefore,
each party’s force majeure clause within its contracts is of importance when dealing with
these particular claims107 Force majeure is a provision in a contract that frees both parties
from obligation if an extraordinary event directly prevents one or both parties from
performing. A non-performing party may use a force majeure clause as excuse for non-
performance for circumstances beyond the party's control and not due to any fault or
negligence by the non-performing party. However, mere impracticality or unanticipated
difficulty is not enough to excuse performance. Force majeure clauses are, as a general
matter, drafted to protect a contracting party from the consequences of adverse events beyond
that party’s control. Application of a force majeure provision, as with any other contractual
provision, starts with the words chosen by the drafters108
Though hardship and force-majeure are inter changeable terms does not indicate that the
same holds in every argument and scenario. There is hardship where the occurrence of events
fundamentally alters the equilibrium of the contract either because the cost of a party’s
performance has increased or because the value of the performance a party receives has
diminished, and
(a) the events occur or become known to the disadvantaged party after the conclusion of the
contract;
(b) the events could not reasonably have been taken into account by the disadvantaged party
at the time of the conclusion of the contract;
(c) the events are beyond the control of the disadvantaged party; and
(d) the risk of events was not assumed by the disadvantaged party.109
The key difference constituting hardship and force majeure is that Performance becomes
excessively onerous but not impossible. The impossibility of performance in occurrence of
impediment situation constitutes a clear distinction between hardship and force-majeure. In
the PSA dated 16 July 2020 the change in law has been included under the separate clause
(i.e. clause 22) beyond the benefit and definition of force- majeure. Art. 79 Of CISG Vienna
Convention 1980 has provisioned that
106
https://academic.oup.com/ulr/article/25/4/437/6055096 (Last Visited: June 3, 2023).
107
United States v. Panhandle Eastern Corp., 693 F. Supp. 88, 95 (D. Del. 1988).
108
Wilmington Firefighters Ass’n v. City of Wilmington, 2002 WL 418032, at Para. 10.
109
UNIDROIT Principles, Art. 6.2.2 (Definition of Hardship).
27 | P a g e
(1) A party is not liable for a failure to perform any of his obligations if he proves that the
failure was due to an impediment beyond his control and that he could not reasonably be
expected to have taken the impediment into account at the time of the conclusion of the
contract or to have avoided or overcome it or its consequences.
(2) If the party's failure is due to the failure by a third person whom he has engaged to
perform the whole or a part of the contract, that party is exempt from liability only if:
(a) he is exempt under the preceding paragraph; and
(b) the person whom he has so engaged would be so exempt if the provisions of that
paragraph were applied to him.
(3) The exemption provided by this article has effect for the period during which the
impediment exists.
(4) The party who fails to perform must give notice to the other party of the impediment and
its effect on his ability to perform. If the notice is not received by the other party within a
reasonable time after the party who fails to perform knew or ought to have known of the
impediment, he is liable for damages resulting from such non-receipt.
The failure of the respondent to mitigate the circumstances, dependency on third party and to
constantly communicate with the claimant cannot confer the benefit of hardship upon the
respondent. This rule reflects the policy that a party who is under an obligation to act must do
all in his power to carry out his obligation and may not await events which might later justify
his non-performance.
This rule also indicates that a party may be required to perform by providing what is in all the
circumstances of the transaction a commercially reasonable substitute for the performance
which was required under the contract. 110 The frustration of purpose of a contract makes
party temporarily halt the performance but does not exempt from the obligation as in the
impossibility of performance. So, situation of hardship though existed thus created frustration
of purpose rather than the impossibility of performance for the respondent to get benefit of
exemption from contractual obligations.
2. GPC INDIA'S MAJORITY STAKE AND INTERESTS IN THE RESPONDENT'S

HOLDINGS.
As per the statement of facts mentioned in page 4. no 2 and 4 which is also asserted by the
respondent the ownership and composition of BOD is mentioned respectively. Ownership
interest refers to any stake a party owns in any property, company, real estate, product, etc. If
there is only one owning party, then only this party has ownership interest. If there are several
parties involved ownership interest is either equally divided or according to the amount
invested by each party. The percentage of ownership interest in a business is in relation to the
percentage of stock a party owns in it111.
110
Commentary on the Draft Convention on Contracts for the International Sale of Goods, prepared by the
Secretariat (UN Doc. A/CONF.97/5),
111
https://contractbook.com/dictionary/ownership-interest (Last Visited: June 1, 2023).
28 | P a g e
As per the statement of facts mentioned and asserted by both the contracting parties the
ownership or stake of respondent is divided as 50% with the GPC India, 40% as owned by
NEA, 10% listed in NEPSE. There is also a provision of independent director as mentioned
in the composition of BOD. The Ex-KKR executive a Zambian National of Nepali origin is
the current independent director. The latest CEO as successor of Mr. Rastra Premi Prasad is
Mr. Binod KKR who is a representative from KKR from in respondent. The GPC India also
holds minority of share in KKR Group which is a globally recognized infrastructure
development firm. GPC India also holds the majority in the BOD with 2 directors being
Indian Citizens appointed by it among 5 members.
The interest and majority of GPC India in the holdings of the respondent stake can be drafted
from the calculations and composition along with the respective associations from the
members there in. GPC India as already mentioned above is the sole transmission licensee for
respondent’s supply of electricity and being a majority shareholder there is no point of GPC
India being a blockade or hindrance in the supply of the electricity. The interest in stake also
makes it possible for GPC India to seek for alternatives or any reasonable and diligence
negotiation with the supplier (i.e claimant) which is also mentioned as obligation in clause
20.2 of the PSA. So, there is no any ground to believe that GPC India wasn’t in
communication and in mutual negotiation with the claimant after the authentication of heated
bill debate regarding the amendment of the Electricity Act 2003.
3. UNLAWFUL INTERPRETATION OF ELECTRICITY ACT 2003 BY
RESPONDENT
The force majeure term of which the respondent is standing upfront against the default in
fulfilling the obligation of supply of electricity has been the amendment of the Electricity Act
2003 by Indian Government. The major amendment has been made in sec 38(3) of the act.
The amendment contains the provision that The Central Transmission Utility shall not
authorize the use of any Indian transmission lines by a foreign seller of electricity which is
not substantially owned or effectively controlled by Indian(s) or an Indian entity. The primary
rule of interpretation is that when words used in the statute provides or highlights for the
plain and textual meaning the words so shall be constructed according to textualism or literal
rule. Lord Hodge in the recent Supreme Court case of Wood vs. Capita Insurance Services
Ltd,1 summed up a court’s task in interpreting a contract: ‘The court’s task is to ascertain the
objective meaning of the language which the parties have chosen to express their agreement.
It has long been accepted that this is not a literalist exercise focused solely on a parsing of the
wording of the particular clause but that the court must consider the contract as a whole and,
depending on the nature, formality and quality of the drafting of the contract, give more or
less weight to elements of the wider context in reaching its view as to that objective
meaning.’112
Any condition of the contract may not be restricted or invalidated indirectly on the basis of
any circumstances different from what is written in the contract. 113 The intention of the
Symons Ben, Force Majeure and Frustration in Commercial Contract, 2022, BPL, pg.4
112
Director General of Irrigation Department Umakant Jha on behalf of Mahakali Irrigation Project,
113
Mahendranagar vs Appellate Court,Patan and others D.NO 8156, NKP.
29 | P a g e
parliament must be deduced from the language used because it the duty of the court to
expound the law as it stands ( Capper vs Baldwin, 1965).
Substantial Owner means any person or persons who own or hold a twenty-five percent
(25%) or more percentage of interest in any business entity seeking a Privilege, including
those shareholders, general or limited partners, beneficiaries and principals; except where a
business entity is an individual or sole proprietorship, Substantial Owner means that
individual or sole proprietor.114 Effective control means a relationship constituted by rights,
contracts or any other means which, either separately or jointly and having regard to the
considerations of fact or law involved, confer the possibility of directly or indirectly
exercising a decisive influence on an undertaking, in particular.115
GPC India which is a transmission licensee under central transmission utility of India as per
the Electricity Act 2003 owns 50% of the stake in respondent which is the supplier of the
electricity to claimant. GPC India being a state-owned company falls within the definition of
Indian entity and current CEO of respondent Mr. Binod KKR also falls within the same. So,
the criteria as per sec 38(3) of substantially owned and controlled by Indian(s) or Indian
Entity is relevant in this context. Respondent has maliciously interpreted the amended section
so as to confer the benefit of the force-majeure event which is irrational and irrelevant.
4. FAILURE TO COMPLY WITH THE STANDARD OF AN EXPORT-ORIENTED

PROJECT.
RESPONDENT generates electricity for Nepalese demand and exports the surplus electricity
to India and to other countries through India, allowing for more efficient utilization of
Nepal’s resources.116 The overall objective of respondent as a producer of electricity the
respondent might claim about the statement of surplus electricity after fulfilling the Nepalese
demand but in the aforementioned exhibit, nothing is mentioned or exhibited about the Upper
Bishnu Khola Project from the production of which claimant is in verge of being supplied the
electricity by respondent.
The 60% of electricity generated from Upper Bishnu Khola project is to be supplied to
claimant as per statement no. 5 of claimant which is asserted by respondent. The surplus
demand being more than that of the preliminary need is a rare sight to witness. So apart from
the unfactual and unevidential denial of export-oriented project from the respondent no other
circumstance is enough to prove that the project is not a export-oriented project. Claimant
believes that based on the division percentage of supply and production of electricity the
project shall be deemed to be export-oriented project beyond reasonable doubt.
114
https://www.lawinsider.com/dictionary/substantial-ownership-and-effective-control (Last Visited: June 1,
2023)
115
Ibid at 108.
116
PSA, Claimant Exhibit C 1 Para.3.
30 | P a g e
A. LACK OF VOLITION TO PURSUE ALTERNATIVES TO MITIGATE THE
SITUATION OF HARDSHIP.
The affected party shall use its reasonable endeavours to:117

i) mitigate and/or overcome the effects of any force majeure event, including by recourse to
mutually acceptable (which acceptance shall not be unreasonably withheld or delayed by
either party) alternative sources of services, equipment and material, and construction
equipment and
ii) ensure resumption of normal performance of this agreement as soon as reasonably
practicable.
The heated bill debate of the amendment of Electricity Act 2003 was passed on 20th March
and surprisingly respondent halted the supply of electricity from the next day i.e., 21st March
and mailed the same in 22nd March. The respondent has asserted the receipt of the advance
payment for the financial year 2022/2023 as mentioned in Claimant Exhibit C 4. The
respondent also has opened doors for further cooperation and understanding regarding the
situation in the same exhibit but failed to do so upon several request and email by the
claimant. Respondent halting the supply of electricity from the next day after the passing of
bill shows no intention of the respondent to seek or look for any alternatives or any mutual
co-operation or understanding to resolve and revisit about the event so occurred. The
situation of hardship existed in the Bangladesh as result of non-resumption of the
transmission of supply of the electricity by the respondent which confers that the respondent
is in the full faith and obligation to seek the mitigatory measures.
Applicable provisions of this Agreement shall continue in effect after termination, including
early termination, to the extent necessary to enforce or complete the duties, obligations, or
responsibilities of the Parties arising prior to termination [….] 118.under the obligation of
transmission licensee clause To immediately communicate to both Buyer and Seller in the
event any hindrance to transmission of the deliverables occurs.[......]119 is mentioned.
Claimant hasn’t received any notice or email thereof from the transmission licence in this
regard and neither anything has been conveyed by the respondent of the same to claimant.
Clause 3.3 and 3.4 respectively mentions that the transmission within Nepal shall be at the
cost of the Seller and the transmission within Bangladesh shall be at the cost of the buyer.
The bearance of the cost of deliverables within respective jurisdiction also leads to the
presumption of the obligation regarding the management and operation of deliverables within
one’s respected jurisdiction of which the respondent is in default.
The sole concern and relation of claimant is only with the respondent and not with the
transmission licensee (GPC India) the transmission licensee is third party for the claimant as
per the doctrine of privity of contract.
Reciprocal performance of contract: (1) If a contract is so concluded that the parties to the
contract shall fulfil their respective obligations simultaneously and one party demonstrates
such conduct or intention that he or she is not willing to fulfil his or her obligation materially,
117
PSA, Clause 21.3.2 9 (C).
118
PSA, Clause 2.3.
119
PSA, Clause 20.2.
31 | P a g e
the other party need not perform his or her promise120. The facts as asserted in the claimant
exhibit C4 about the advance payment leaves no ground on default of fulfilling the obligation
or performance of contract by claimant. So, respondent as a responsible party to contract has
defaulted in maintaining the sanctity of contract and have violated the principle of “Pacta
sunt servanda” Every treaty in force is binding upon the parties to it and must be performed
by them in good faith.121
B. BLATANT NEGLIGENCE IN THE AFTERMATH OF A HEATED AND

CONTROVERSIAL BILL DEBATE FOR A PERIOD OF 15 DAYS.
The respondent had a fiduciary duty of care to monitor and actively participate in the
legislative process, especially when the proposed amendment directly affects their interests.
They had an obligation to stay informed and actively engage in the debate to protect their
rights and interests. It was reasonably foreseeable that the proposed amendment could have
significant consequences for the negligent party. They should have anticipated the potential
impact and taken appropriate steps to stay engaged and informed during the legislative
process. By failing to pay attention to the bill and actively participate during the 15-day
period, the respondent contributed to their own detriment. They had a responsibility to
exercise reasonable diligence and prudence in safeguarding their interests, which they failed
to do.
The respondent, being directly affected by the proposed amendment, should be deemed to
have knowledge of the legislative developments and the potential consequences. Their lack of
attention cannot be excused as they should have been aware of the need to actively monitor
and engage in the process. The claimant suffered prejudice as a result of the negligent party's
inaction. The failure to pay attention and participate in the debate allowed the amendment to
pass without proper scrutiny or opposition, leading to potential harm or disadvantage for the
respondent. Negligence in monitoring and participating in legislative processes can have legal
consequences. The respondent should be held responsible for their lack of attention and the
resulting impact on their own interests and the interests of the claimant.
There was gap of 15 days in between the emergence of the bill and passing of the bill and
substantially the respondent and transmission licensee were in a visionary and long term
oriented PTA agreement whereby according to the claim of respondent regarding the
amendment would probably lead to hindrance in the commercial transaction and agreement
between them for which the respondent didn’t paid any attention to or failed to act in good
faith to initiate some reasonable step to mitigate the hardship and consequences which the
bill would cause herein. The blatant negligence also constitutes upon the prima facie
invalidity of the notice of force majeure by the respondent.
120
Civil Code 2074, s.522.
121
VCLT, Art.26, (1969).
32 | P a g e
C. DEFICIENCY IN CONSISTENT AND UPDATED COMMUNICATION WITH
THE CLAIMANT.
The non-affected party has a contractual duty to communicate with the affected party
regarding the force majeure event and its impact on the performance of the contract. Failure
to provide regular and updated communication constitutes a breach of this duty. Parties to a
contract have an overarching duty of good faith, which includes the obligation to
communicate honestly and transparently. By neglecting to provide regular and updated
communication, the non-affected party fails to fulfil this duty and acts contrary to the
principles of good faith. The non-affected party's lack of regular and updated communication
can be considered negligent behaviour. They have a responsibility to exercise reasonable care
in keeping the affected party informed about the force majeure event, its duration, and any
changes in circumstances that may affect the parties' obligations.
The claimant has relied on the non-affected party's communication or lack thereof to make
important business decisions. If the non-affected party's failure to communicate resulted in
the affected party suffering damages or losses, then non-affected party is liable for all the
damages and compensation to be paid thereof.
Facilities to be provided: 122
(1) The parties to a contract shall provide to each other such facilities as may be needed to
perform the contract from their respective sides.
(2) If the contract cannot be performed due to the failure to provide such facilities, the party
in default of the performance shall not be held liable responsible.
It is the duty of the respondent to create a favourable and mitigatory environment upon the
occurrence of hardship which clearly justifies the malicious and improper intention of the
respondent to avoid the contractual obligation and against the pacta sunt servenda. A contract
when not performed thoroughly and in good faith leads to the unfavourable situation among
the contracting parties.
The provisions of Clause 21.3.1 shall apply provided that:123
(ii)the affected Party proceeds with reasonable diligence to remedy its inability to perform its
effects;
(iv) the affected Party provides the non-affected Party (at the sole cost and risk of the non-
affected Party) reasonable facilities for obtaining further information about the Force Majeure
Event, including the inspection of any relevant facility
Apart from the mail dated 22nd march 2023 there hasn’t been any source and evidence of
communication and information from the respondent regarding the force-majeure event.
Generally, "[w]hen one party to a contract repudiates his contractual duties before time for
performance, the other party may elect to treat the contract ended. In such cases the
nonbreaching party is not required to tender performance or to comply with conditions
122
Civil Code 2074 s.532.
123
PSA, clause 21.3.2.
33 | P a g e
precedent124."So, the respondent has severely failed to comply all the provision related to get
the benefit of the event so rendered.

DAMAGES TO THE CLAIMANTAND RESUME COMPLIANCE WITH ITS
2020?
The halted supply of electricity by the respondent despite the non-categorization and
fulfilment of such action within the criteria and requirement of the force-majeure the
respondent has intended to breach the contract. The standby principle of contract law states
that “where there is a breach there is a remedy”.
The compensation for the breach of contract under sec.537 of Civil Code 2074 includes but is
not limited to:
If the contract does not provide for compensation referred to in sub-section (2), the party
claiming such compensation shall be entitled to recover a reasonable amount for the direct
and actual loss or damage resulted from the breach of contract or for the breach of contract or
for compensation.
1. RESPONDENT IS LIABLE TO PAY DAMAGE AS A FAILURE TO COMPLY

WITH TRANSMISSION OBLIGATIONS UNDER PSA.
A breach of contract occurs whenever a party who entered a contract fails to perform their
promised obligations. 125Compensatory damages are the most popular form of legal remedy
requested in breach of contract cases. They are meant to compensate the non-breaching party
for any financial losses suffered as a result of the breached contract. Compensatory damages
are used to make the non-breaching party whole again, and can include such things as costs
for loss of future earnings, costs of hiring new parties to complete the contract, etc.
The remedy of restitution is based on the Latin principle ‘restitution in intehrum’. It means
returning everything to the state as it was before. The parties to a contract have to return the
benefit to each other, which were received under the contract. The rule is applicable to the
contracts discovered to be void or becoming void. The principle of nullus commodum capere
de sua injuria propria (no advantage may be gained from one’s own wrong) 126 is also equally
applicable in the side of respondent as respondent shall not wrongfully claim the benefit of
force majeure to be exempted from the payment of damages in accordance to the principle of
quantum meruit. The claimant has prepaid the advance due for the year 2022/23 for which the
respondent is in default of the performance which leads to the unjust enrichment.127
124
Bituminous Cas. Corp. v. Com. Union Ins. Co. , 273 Ill.App.3d 923, 210 Ill.Dec. 216, 652 N.E.2d 1192, 1197
(1995).
125
https://www.law.cornell.edu/wex/breach_of_contract (Last Visited: June 2, 2023).
126
Occidental Petroleum v Ecuador, Award, 5 October 2012, para 564
127
Strabag v Libya, Award, 29 June 2020, paras 881, 899–900. See also C Binder, ‘Unjust Enrichment
as a General Principle of Law in Investment Arbitration’ in A Gattini et al (eds) General Principles of Law
and International Investment Arbitration (2018) 269.
34 | P a g e
In the case of National Thermal Power Corporation Ltd. vs. Singer Company and Ors
(1992), the principle established was that a party who fails to perform its contractual
obligations due to a force majeure event is not automatically absolved of liability for any
advance payment received. The court held that force majeure does not operate as a complete
defence to non-performance if the party claiming force majeure had already received an
advance payment. The receiving party has an obligation to return the advance payment if it
fails to perform due to a force majeure event.
This principle underscores the importance of the principle of restitution, where if a party is
unable to fulfil its contractual obligations due to a force majeure event, any advance payment
received should be returned to the paying party. This ensures fairness and prevents unjust
enrichment of the non-performing party. If the claimant has made the payment in all or part
and defendant has breached the performance the claimant is entitled to restitution for the
money he paid128.
Breach of contract deemed to occur: 129
(1) If any party to a contract fails to fulfil the obligation under the contract or gives a
notice to the other party that he or she will not perform the act to be performed by him
or her under the contract or his or her action and conduct demonstrate that he or she is
incapable of performing the act under the contract, the party shall be deemed to have
breached the contract.
Consequences of rescission or voidance of contract:130
(1) If, after a party to a contract has already received some cash or kind or any other benefit
from the other party or after the fulfilment of the obligations under the contract partially, the
contract is rescinded by mutual consent of the parties and the performance of the contract is
not required under this Part or other law, the contract is voided or declared to be void
according to law or the contract becomes invalid or is rescinded under this Part, such cash,
kind or service so received shall be returned upon having settled the accounts of the cash or
kind given until the date of the contract being in force.
(2) If any service or advantage other than cash or kind has been given pursuant to sub-section
(1), the party receiving such service or advantage shall pay a reasonable amount to the other
party in consideration for such service or benefit.
(3) If it becomes necessary to institute legal action by the reason of failure to return the cash
or kind or to pay the amount as referred to in sub-section (1), a reasonable expense incurred
for that purpose may also be recovered.
According to the Article 35(2) of SIAC Rules, the term “costs of the arbitration” includes: (a)
the tribunal’s fees and expenses and the Emergency Arbitrator’s fees and expenses, where
applicable; (b) SIAC’s administration fees and expenses; and (c) the costs of any expert
appointed by the Tribunal and of any reasonably required by the tribunal.
Costs follow the event (“loser pays”) states, the use of costs as a sanction for procedural
misconduct of costs131. The principle of pacta sunt servanda, the very basis of treaty law132,
128
Nash v. Towne, 72 U.S. (5 Wall.) 689, 701-02 (1866).
129
Civil Code 2074, s.535(1).
130
Civil Code 2074, s. 538.
131
N.D.Rubins , The Allocation of Costs and Attorney’s Fees in Investor-State Arbitration, 109 ICSID REV–
FOREIGN INV. L. J. 126, 126–129 (2003).
132
Vienna Convention on Laws of Treaties Art.26, May,23,1969.
35 | P a g e
entails that every treaty is binding upon the parties to it and must be performed by them in
good faith. This principle in the law of treaties has its roots on good faith. 133 Article 26 of
VCLT signifies a codification of a fundamental principle of law derived from international
custom134 now shown in judicial decisions as well.135
Under Claimant Exhibit C4 the respondent has asserted to the fact that claimant has made the
advance payment for the fiscal year 2022/23. The advance payments are amounts paid before
a good or service is actually received. The advance payment by the claimant were made as
per maintaining the sanctity of the contract and adhering the principle of Pacta Sunt
Servenda. The respondent not-complying with the criteria of force majeure as in
aforementioned argument is liable to pay damage for the advance payment incurred and also
the cost of arbitration which the claimant had to enforce.
2. THE RESPONDENT IS LIABLE TO RESUME COMPLIANCE WITH ITS
OBLIGATIONS UNDER THE POWER SALES AGREEMENT.
Respondent, GPC India, and the Claimant entered a tri-partite PSA on 16 July
2020.136Respondent is required to comply with its obligation under clause 18 of the PSA like
to meet its supply commitments to the Buyer in a timely manner 137 and to coordinate with the
Transmission Licensee in effectively meeting the deliverables as provided under Clause 3. 138
And meet the requirement under clause 3 of PSA i.e. The Seller shall deliver 60% of the
electricity generated per month from the Project to the Buyer.139 Its mentioned under clause
2.3 that applicable provisions of this Agreement shall continue in effect after termination,
including early termination, to the extent necessary to enforce or complete the duties,
obligations, or responsibilities of the Parties arising prior to termination and, as applicable,
without limitation, to provide for final billings and adjustments related to the period prior to
termination, repayment of any money due and owing to either Party pursuant to this
Agreement, and the indemnifications specified in this Agreement.140
Respondent unilaterally exercised force majeure by invoking the change in law in India as a
force majeure event. The burden to prove inability to perform due to force majeure is very
high.141 A measure will qualify as a change in law if it brings about a major change that could
not reasonably have been anticipated and that has a significant economic impact. 142 As
established the amended provision of the electricity act - the Central Transmission Utility
shall not authorize the use of any Indian transmission lines by a foreign seller of electricity
which is not substantially owned or effectively controlled by Indian(s) or an Indian entity 143
doesn’t affect the respondent. The burden of proving force majeure lies on the party invoking
it.144 The Respondent has failed to discharge this burden. The threshold for finding force
133
Nuclear Tests (New Zealand v France), Judgment, 1974 I.C.J. Rep. 1974, 457, \\ 49 (Dec. 20).
134
VIENNA CONVENTION ON THE LAW OF TREATIES A COMMENTARY 467 (Oliver
Dörr&KirstenSchmalenbach eds., Springer, 2018) pg. no 475.
135
Rainbow Warrior’ Affair (New Zealand v France), 20 R.I.A.A. 217, 251 (U.N. Arb. 1990).; Sole arbitrator
Dupuy in Texaco v Libya 53 I.L.R. 389, 19 para 51 (Int’l Lab. Org.Admin.Trib.1977).
136
NoA, para 8.
137
PSA, 2020, clause 18.2.
138
PSA, 2020, clause 18.5.
139
PSA, 2020, clause 3.1.
140
PSA, 2020, clause 2.3.
141
Al-Bahloul v Tajikistan, ICSID Case No. V063/2008, para 24.
142
Duke Energy v Peru (ICSID Case No. ARB/03/28), 2016 para 253.
143
Electricity act-2003, s 38(3).
144
Occidental v Ecuador, ICSID Case No. ARB/06/11, para 622.
36 | P a g e
majeure is very high and mere disturbance does not constitute force majeure. 145 The
Respondent failed to demonstrate how ‘change in law’ amounts to impossibility of
performance which would constitute a force majeure event.
Bangladesh has been experiencing a severe power shortage, resulting in widespread

inconvenience and hardship for our citizens.146 The failure of respondent to fulfil the supply
obligations has only exacerbated this situation. Respondent is required to resume compliance
as a good faith performance obligation. The obligation of good faith in commercial contracts
is a general principle of law which permeates many aspects of contract law. 147 A party’s
obligation to perform a contract in good faith involves not only refraining from taking active
steps to frustrate or hinder performance by the other party but also includes taking positive
action to cooperate with and assist the counterparty when necessary. 148 We humbly request
this tribunal and demand specific performance of contract as provisioned under Nepalese law.
If monetary compensation is not reasonable and adequate for the actual loss or damage
suffered by the aggrieved party because of the breach of contract, the aggrieved party may
claim for the specific performance of the contract instead of compensation. 149 Hence, it is our
submission that respondent is responsible for resuming compliance with its obligations under
PSA because: the parties have entered into a valid and binding contract, good faith
performance principle underlying international commercial contracts like PSA and claimant
has incurred damages due to respondent non-compliance.
PRAYERS OF RELIEF
145
Occidental v Ecuador, ICSID Case No. ARB/06/11, para 624.
146
Claimant Exhibit C 6, para 2.
147
Societe Generale pour la Vente de Combustibles et Lubrifiants SA v Israel Discount Bank Ltd., [1987] QB
946.
148
Gazprom OAO v Republic of Lithuania, SCC Case No. 2006/02, para 406-408.
149
Civil code 2074, s 540.
37 | P a g e
In light of the legal precedents and principles cited; and in light of the General conditions of
contract Clauses to be applied and arguments advanced; and in light of the scientific studies
relating to the issue r on the basis of prior and foregoing written submissions, the
CLAIMANT humbly prays and requests that the Tribunal to ADJUDGE and DECLARE
that:
1. CLAIMANT wasn’t required to join GPC India as a party to the Arbitration.

2. There didn’t existed a situation of force-majeure which prevented the RESPONDENT
from fulfilling its obligation under the PSA Agreement.
3. The said situation didn’t impact the RESPONDENT’S ability to discharge its contractual
obligations under the PSA.
4. RESPONDENT is liable to pay damages to the CLAIMANT
5. RESPONDENT is liable to resume compliance with its obligations under the PSA.
Or any other order

and/or declaration that the Tribunal may deem fit in light of justice, equity and good
conscience.
Respectfully submitted,
COUNSELS FOR CLAIMANT
38 | P a g e

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TEAM CODE: ‘YALUNG KHANG’

FOURTH BRU FOUNDATION MOOT COURT COMPETITION

BANGLADESH POWER DEVELOPMENT BOARD (BPDB)

HIMALAYAN HYDRO NEPAL LTD (HH NEPAL)

MEMORIAL FOR THE CLAIMANT

On submission to the Singapore International Arbitration Centre (SIAC)

CASE LAWS CITED.............................................................................................................16

ISSUE I- WHETHER OR NOT THE CLAIMANT WAS REQUIRED TO JOIN GRID

1. RESPONDENT DIDN’T RESUME COMPLIANCE WITH ITS OBLIGATION

2. THE DOCTRINE OF PRIVITY OF CONTRACT PREVENTS CLAIMANT

3. LACK OF EVIDENCE CONNECTING GPC INDIA TO THE DISPUTE AS

A. RESPONDENT UNILATERALLY EXERCISED FORCE MAJEURE CLAUSE.. .29

B. CHANGE IN LAW IN INDIA DOES NOT AFFECT RESPONDENT IN

C. RESPONDENT ACTED IN BAD FAITH IN INVOKING FORCE MAJEURE......30

4. GPC INDIA DOES NOT FULFIL REQUIREMENTS UNDER SIAC NEITHER AS

A. GPC INDIA DOES NOT FULFIL JOINDER REQUIREMENT UNDER SIAC......31

B. PRESENT ISSUE DOES NOT FULFIL CONSOLIDATION REQUIREMENT

ISSUE II: WHETHER OR NOT THERE EXISTED A SITUATION OF FORCE

1. THERE WAS A SITUATION OF HARDSHIP................................................................33

2. THE RESPONDENT IS REQUIRED TO FULFIL PROCEDURE PURSUANT TO

A. "INABILITY TO CONFER UPON THE RESPONDENT THE BENEFIT OF

B. "NON-COMPLIANCE WITH FORCE MAJEURE PREREQUISITES BY THE

3. AMENDMENT IN ACTS CONFERRS AS AN EXCEPTION OF FORCE

A. LACK OF PREREQUISITES FOR ACTIVATION OF LEGAL IMPRACTIBILITY

B. THE SITUATION PROVES TO BE EXCEPTION OF FORCE MAJEURE............40

4. THE RESPONDENT HAS FAILED TO FULFIL ITS CONTRACTUAL

A. THE RESPONDENT IS ENTITLED TO ENSURE THE PRINCIPLE OF

B. THE RESPONDENT HAS FAILED TO COMPLY WITH DUTY TO MITIGATE

C. RESPONDENT CAN’T INVOKE THE FORCE MAJEURE PROVISIONS TO

5. THE RESPONDENT HAS NO LEGAL RIGHT FOR TERMINATION OF

A. THE NOTICE OF FORCE MAJUERE BY RESPONDENT IS PRIMA FAICE

ISSUE III: IF SUCH A SITUATION EXISTED, THEN WHETHER OR NOT THE

1. THE SITUATION OF HARDSHIP EXISTED.............................................................44

2. GPC INDIA'S MAJORITY STAKE AND INTERESTS IN THE RESPONDER'S

3. UNLAWFUL INTERPRETATION OF ELECTRICITY ACT 2003 BY

4. FAILURE TO COMPLY WITH THE STANDARD OF AN EXPORT-ORIENTED

A. LACK OF VOLITION TO PURSUE ALTERNATIVES TO MITIGATE THE

B. BLATANT NEGLIGENCE IN THE AFTERMATH OF A HEATED AND

C. DEFICIENCY IN CONSISTENT AND UPDATED COMMUNICATION WITH

ISSUE IV: WHETHER OR NOT THE RESPONDENT IS LIABLE TO PAY

1. RESPONDENT IS LIABLE TO PAY DAMAGE AS A FAILURE TO COMPLY

2. THE RESPONDENT IS LIABLE TO RESUME COMPLIANCE WITH ITS

AAA American Arbitration Association

BOD Board Of Directors

BPDB Bangladesh Power Development Board

CEO Chief Executive Officer

CISG Convention on Contracts for the International Sale of Goods

Claimant Bangladesh Power Development Board

ed, edn Edition

GPC India Grid Power Corporation of India Ltd.

HH Nepal Himalyan Hydro Nepal Ltd.

ICC International Chamber of Commerce

KWHr KiloWatt Hour

LCIA London Court of International Arbitration

NEA Nepal Electric Authority

NEPSE Nepal Stock Exchange

NOA Notice of Arbitration

PSA Power Sales Agreement

PTA Power Trade Agreement

Respondent Himalyan Hydro Nepal Ltd.

SIAC Singapore International Arbitration Centre

SIAC Rules Singapore International Arbitration Centre Rules(6th edition, 2016)

USD United State Dollar