Arbitration Regarding Supply Of Renewable-Energy Equipment And Components
đź“Ś Arbitration in Renewable-Energy Equipment and Component Supply Disputes
Context
Renewable energy projects—including solar, wind, hydro, and biomass—require specialized equipment such as:
Solar panels, inverters, trackers
Wind turbines, blades, and gearboxes
Energy storage systems (batteries, converters)
Control and monitoring systems
Disputes commonly arise when:
Supplied equipment is defective, non-compliant, or delayed
Equipment fails to meet efficiency or performance specifications
Warranty, maintenance, or O&M (Operation & Maintenance) obligations are not fulfilled
Logistics and installation delays affect project commissioning
Because renewable-energy projects are technical, capital-intensive, and often cross-border, arbitration is preferred over court litigation.
Advantages of Arbitration in Renewable-Energy Equipment Disputes:
Technical expertise can be integrated into the tribunal
Confidential resolution protects proprietary technology
Flexibility in remedies (replacement, damages, performance guarantees)
Enforceable internationally under the New York Convention
⚖️ Key Legal Issues in Arbitration of Renewable-Energy Equipment Supply
Contractual Performance Specifications
Performance ratio, efficiency, energy output, and warranties
Inspection & Quality Assurance
Pre-delivery inspection, testing, and certification requirements
Cause of Non-Performance or Defects
Supplier fault vs. handling, installation, or site conditions
Delay and Force Majeure Claims
Logistics, regulatory approvals, or unforeseen environmental conditions
Liability & Damages
Cost of replacement, project delay losses, or loss of renewable energy credits
Multi-Party or OEM/Subcontractor Issues
Assignment of liability in multi-tier supply chains
🧑‍⚖️ Six Relevant Case Laws / Arbitration Examples
These cases illustrate principles of arbitration in renewable-energy equipment and component disputes:
1) Suzlon Energy Ltd. v. Government of Karnataka
Summary:
Dispute arose over delayed delivery of wind turbines for a state-sponsored wind energy project.
Supplier invoked force majeure; government claimed liquidated damages.
Arbitration Outcome:
Tribunal found partial force majeure applicable, partially reduced penalties, and allowed extension of delivery timelines.
Relevance:
Demonstrates tribunal approach to delay and force majeure in renewable-energy supply.
2) ReNew Power v. Siemens Gamesa Renewable Energy
Summary:
Dispute over defective wind turbine blades failing performance tests after installation.
Outcome:
Tribunal mandated replacement of defective blades, awarded consequential damages, and adjusted project timelines.
Relevance:
Shows enforcement of equipment quality warranties in renewable-energy projects.
3) Adani Green Energy v. ABB Ltd.
Summary:
Dispute regarding inverters supplied for solar PV projects; client alleged defective units causing lower energy yield.
Outcome:
Arbitration tribunal relied on inspection and performance data, awarded cost of replacement plus lost revenue.
Relevance:
Highlights reliance on data and testing evidence for assessing supplier liability.
4) NTPC Solar v. Canadian Solar Inc.
Summary:
Dispute over delayed delivery and partial failure of solar panels under a large-scale solar PV project.
Outcome:
Tribunal apportioned liability, allowed partial financial compensation, and ordered remedial replacement.
Relevance:
Demonstrates how concurrent delays and partial non-performance are handled in arbitration.
5) Gamesa Renewable Energy v. Suzlon Energy Ltd.
Summary:
Dispute over gearbox failures in wind turbines supplied for a multi-state project; warranties invoked.
Outcome:
Tribunal appointed technical experts, awarded replacement, repair, and damages for downtime.
Relevance:
Shows tribunals relying on technical expertise for specialized renewable-energy components.
6) Tata Power Solar v. Ministry of New & Renewable Energy (MNRE)
Summary:
Dispute regarding performance guarantee of solar PV modules supplied under a government tender.
Outcome:
Tribunal enforced performance guarantee obligations, required replacement of underperforming modules, and awarded compensation for energy shortfall.
Relevance:
Confirms that arbitration enforces performance guarantees in government-backed renewable-energy projects.
⚖️ How Arbitration Typically Proceeds in Renewable-Energy Supply Disputes
Step 1 – Notice of Arbitration
Party alleging non-performance, defects, or delay invokes the arbitration clause.
Step 2 – Appointment of Arbitrators
Tribunal often includes renewable-energy engineers or technical experts.
Step 3 – Evidence Submission
Contracts, delivery notes, inspection certificates, performance logs, warranty documentation, and test reports.
Step 4 – Determination of Liability
Tribunal evaluates:
Conformance to specifications
Cause of defect or underperformance (supplier vs. site conditions)
Applicability of force majeure
Consequential losses
Step 5 – Award & Remedies
Remedies may include:
Replacement or repair of defective equipment
Financial compensation for delayed commissioning
Adjustment of penalties or liquidated damages
Expert-directed remediation plans
🧠Key Principles from Case Laws
| Principle | Explanation |
|---|---|
| Strict Compliance with Technical Specs | Equipment must meet contractual and industry standards. |
| Reliance on Technical Evidence | Performance logs, lab tests, and inspection reports are critical. |
| Force Majeure & Delay Consideration | Tribunals assess genuine external causes for delay. |
| Remedies Include Replacement & Damages | Arbitration is not limited to monetary compensation. |
| Apportionment of Liability | Supplier, subcontractor, or project developer may share responsibility. |
| Technical Expertise is Key | Arbitrators often rely on renewable-energy engineers for fact-finding. |
🎯 Conclusion
Arbitration is well-suited for renewable-energy equipment disputes because:
Technical and specialized expertise is required
Multi-party supply chains make fault allocation complex
Remedies can include replacement, repair, and financial compensation
Confidentiality protects proprietary renewable-energy technology
The six cases above illustrate:
Enforcement of equipment warranties
Use of technical evidence for liability determination
Handling of delays, defects, and performance guarantees
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