-----Original Message-----
From: 	Lundstrom, Bruce  
Sent:	Tuesday, June 12, 2001 1:14 PM
To:	Derrick Jr., James; Haedicke, Mark E.; Walls Jr., Rob
Cc:	Rogers, Rex
Subject:	Dabhol -- A Brief Legal Update

Gentlemen -

A few updates:

The second Bombay High Court hearing was held today.  The court asked DPC to go away for a week and try to continue discussions with MSEB.  The parties are to return to the court in a week for another hearing.  We are not entirely sure why the court made this request -- it has nothing to do with the MERC jurisdiction issue before the court.  One possible positive interpretation:  The court feels the need to generate some positive publicity ("I tried to encourage a positive outcome") before ruling in our favor on the jurisdiction issue.  But, again, the court's motives are not clear.

We still don't know if some or all of the lenders will try to cure the construction contract defaults this week.  I would expect that we would receive formal termination letters over the weekend from the contractors if the contractors are not paid in full this week.  

Some of you are aware that DPC's relationship with its Indian outside counsel has recently shown some strain.  That strain did not affect the quality of DPC's representation at the Bombay High Court hearing.  However, I'm also pretty sure that the strain has not been permanently "fixed" and that further efforts will be required in this regard.  Gail Brownfeld and Jim McCartney are helping DPC with these issues.

Bruce