In a landmark decision, the Bombay High Court has upheld a large damages award made by arbitrators against the Maharashtra State Electricity Distribution Company (MSEDCL). In Maharashtra State Electricity Distribution v DSL Enterprises Pvt Ltd, the court directed MSEDCL to pay damages of Rs1.85 billion (US$37 million), plus interest at the rate of 10%, to private firm DSL Enterprises as compensation for breach of a contract. The court cited corruption as the cause of the breach and held that the award of damages was granted to compensate DSL, which had been victimized because of the maleficent acts of the officers of the state. Never before have arbitrators and courts in India been so bold in their approach towards the granting of damages.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.