Failure of India’s Maharashtra state to pay Bechtel $123 million for violations of its shareholder rights in the Dabhol power project has seen the US company win a federal court ruling. The ruling allows Bechtel to seize assets held by Maharashtra Power Development Corporation Ltd, which holds a 14.6% share in Dabhol Power Corp (DPC).
The International Court of Arbitration in Paris ruled in late April that the Maharashtra state government and the Maharashtra Power Development Corporation conspired to block DPC from exercising its contractual rights to arbitrate its claims against the state of Maharashtra and government of India for the expropriation of DPC’s investment. Bechtel took action when the payment deadline lapsed.
“We are disappointed that Indian authorities have given us no choice but to begin proceedings to seize their assets,” said Bechtel executive vice president and director Tim Statton. “Their refusal to acknowledge valid legal orders also sends a very troubling message to foreign investors whose capital and technical expertise could help modernise India’s infrastructure. Nevertheless, we stand ready to help restart the much-needed Dabhol facility, once India upholds our legal rights and abides by its international obligations.”
In 2003, another independent tribunal in the US ruled unanimously in Bechtel’s favour, finding that its interests in DPC were illegally taken.
