Risks in electricity contracts

Chitrakshi Jain () and Akshay Jaitly
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Chitrakshi Jain: TrustBridge Rule of Law Foundation

No 22, Working Papers from Trustbridge Rule of Law Foundation

Abstract: This paper empirically studies how India's Central Electricity Regulatory Commission adjudicates force majeure disputes in electricity contracts. We examine 52 orders covering 77 party-level observations between 2018-2023. We find that solar generators bring the most claims, and that parties typically litigate during the pre-commissioning phase seeking extensions of time. We find that foreseeable risks like bureaucratic delay and grid or transmission constraints are frequently cited as the events for which such extensions are sought. The Commission rejected 56 of the 77 claims from our dataset. A significant share of rejections emanate from connectivity and transmission agreements, indicating a gap in how interdependent contracts are designed in the sector. Our findings indicate that force majeure litigation in the electricity sector is a result of insufficient appraisal of risks.

Pages: 29 pages
Date: 2026-08
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https://trustbridge.in/RePEc/papers/20260813__Jainetal_fmPaper.pdf First version, 2026 (application/pdf)

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