jim --
	
	good reading.

 -----Original Message-----
From: 	Jim Mccartney <jw1000mac@yahoo.com>@ENRON [mailto:IMCEANOTES-Jim+20Mccartney+20+3Cjw1000mac+40yahoo+2Ecom+3E+40ENRON@ENRON.com] 
Sent:	Thursday, May 31, 2001 1:48 PM
To:	Walls Jr., Rob
Subject:	Fwd: Dabhol Power Project - MERC Proceeding


Note:rob, see attached from cw. jim


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From: "Walker, Christopher" <christopher.walker@linklaters.com>
To: "'Jim Mccartney'" <jw1000mac@yahoo.com>,        "Walker, Christopher"	 <christopher.walker@linklaters.com>
Cc: bruce.lundstrom@enron.com
Subject: Dabhol Power Project - MERC Proceeding
Date: Thu, 31 May 2001 22:16:09 +0800
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Jim,

In answer to your points:-

(1) The method of challenge (to the main Petition before MERC) is by Writ
Petition under Articles 226 and 227 of the Constitution of India. This is
the procedural means by which the High Court controls and supervises the
activities of lower Courts and administrative tribunals. It is,strictly,a
public law proceeding rather than a private law proceeding.
Again,strictly,we cannot use a Writ Petition as a means of asserting a right
to have these proceedings stayed under section 45 of the Arbitration and
Conciliation Act 1996. That is a private law application. We could only get
that inot the High Court by first making that application to the MERC,having
it refused and then proceeding by way of statutory appeal. Clearly,a stay
application presumes that the MERC has jurisdiction.

(2) The way to tackle the injunction is to apply to have it discharged or
modified. If (perhaps when) MERC says no,there is a statutory right of
appeal to the High Court.

(3) The Writ Petition is an all or nothing excercise. Realistically,if DPC
succeeds in the Writ Petition,the MERC is dead and so (ultimately) will be
the MSEB. I think that I can fairly safely predict that in front of any
half-decent tribunal in London,the recission claim is going to go nowhere.
If,however,DPC does not succeed on jurisdiction,I cannot see a stay
application succeeding in front of the MERC. If the Court says that the MERC
has jurisdiction,you can bet your bottom dollar on the fact that it will be
excercised. No doubt DPC could file a statutory appeal to the High Court
(against a refusal to grant a stay),but that will take a very long time to
get heard in these circumstances.

(4) The prcedural stroke which requires to be played right in the High Court
is getting the Court to deal with this Writ Petition urgently. Should that
occur,we should get home sooner rather than later (working on Indian
time,that is). If,contrary to my expectation,the Court sits on the
matter,then we are in difficulties. It is going to be hard to appeal when
the decision is that there is no decision.

(5) I do not think that DPC can prudently disregard the MERC's order. Aside
from the invocation of contempt procedures against DPC,the MSEB would simply
apply to the High Court for an injunction directly. Also,will our Lenders
really allow DPC to serve a Termination Notice in these circumstances (given
that the Phase I dollar Lenders require to get to the GOI Guarantee)? I
personally doubt it. As a practical matter I believe that we have to comply
with the MERC's orders unless and until the High Court says that MERC has no
jurisdiction. The more practical approach is this. Having filed our Writ
Petition,nothing prevents us from applying to MERC to vary its current
order. If it refuses,we file a stautory appeal against its order and apply
to the Chief Justice to have both matters conjoined. That is what we ought
to be doing.

(6) I do not know enough about our PRI coverage (certainly the OPIC cover)
to say with certainty. However,the Lloyd's Policy has the better coverage
(subject to whatever right the underwriters may have to avoid for
non-disclosure on placing). That policy requires that DPC obtains an
arbitral award. I think that we should be doing all that we can to preserve
the position viz-a-viz that policy. This seems to dictate that we comply
with the MERC's orders,at least for the time being. One remedy for contempt
by a corporate body is the appointment of a receiver. The implications of
that for obtaining any arbitral award are obvious.

-----Original Message-----
From: Jim Mccartney [mailto:jw1000mac@yahoo.com]
Sent: 31 May 2001 06:46
To: christopher.walker@linklaters.com
Cc: bruce.lundstrom@enron.com
Subject: dpc


chris, is there any established procedure under indian
procedural or substantive law on how we challenge the
merc injunction? if we lose before the bombay high
court, e.g. they decline to consider the matter or
just sit on it, what then? appeal to the s.ct.,
mandamus? since we would have to rely on the indian
courts to enforce an arbitration award (as i recall)
what good would it do to disregard the merc's order
(and the court's) and proceed with the arbitration-- a
high risk venture--could it help us with our political
risk coverage or other extra-india protections? we
would appreciate your thoughts. best regards, jim

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