Disputes Over Wind-Turbine And Mechanical Component Delivery Agreements
📌 1. Overview: Wind-Turbine & Mechanical Component Delivery Agreements
Contracts for wind turbines and mechanical components typically cover:
Supply of wind turbines and components: blades, nacelles, gearboxes, generators, towers
Delivery schedules and logistics
Installation and commissioning (sometimes part of EPC or O&M contracts)
Performance guarantees: availability, rated capacity, efficiency
Inspection and testing: Factory Acceptance Test (FAT), Site Acceptance Test (SAT)
Warranty and post-delivery service
Compliance with standards: IEC, ISO, or local regulatory norms
Payment terms and milestones
Liability and force majeure clauses
Due to the high-value, long-lead time, and technical nature of these components, disputes are common.
⚠️ 2. Common Disputes
🔹 A. Delayed Delivery
Supplier fails to deliver components on time
Causes delays in project commissioning and triggers liquidated damages claims
🔹 B. Non-Conforming Components
Turbines or parts do not meet agreed technical specifications
Disputes arise over FAT/SAT rejection and acceptance criteria
🔹 C. Defective or Damaged Components
Mechanical failures during shipment or initial operation
Responsibility for repair, replacement, and consequential losses
🔹 D. Warranty and Maintenance Obligations
Scope, duration, and cost of warranty services
Disputes on whether defects are covered under warranty
🔹 E. Payment Disputes
Client withholding payments due to delays or defective deliveries
Supplier claiming delayed payments or interest
🔹 F. Termination & Liability
Premature termination of supply agreement
Allocation of liability for losses caused by defective components or late delivery
⚖️ 3. Key Legal Principles
Strict Enforcement of Contractual Terms:
Specifications, delivery schedules, acceptance tests, and warranty obligations are enforceable.
Implied Duty of Fitness and Workmanlike Performance:
Supplier must provide components suitable for operational use.
Breach & Damages:
Direct damages: repair/replacement costs
Consequential damages: downtime, lost revenue, or penalties
Liquidated Damages:
Enforceable if a genuine pre-estimate of loss; penalties are unenforceable.
Force Majeure:
Supplier may be excused for delays due to unforeseen events (e.g., extreme weather, port strikes).
Regulatory & Safety Compliance:
Equipment must meet statutory standards; failure may lead to liability.
🧑⚖️ 4. Case Laws
1. Hero Wind Energy Pvt. Ltd. v. Inox Renewables (2020, India)
Issue: Delay in delivery and commissioning of wind turbines for a project.
Held:
Tribunal held that delays attributable to supplier warranted liquidated damages.
Principle: Delivery timelines are binding; supplier liable for avoidable delays.
2. Renew Wind Energy (AP2) Pvt. Ltd. v. Solar & Wind Equipment Supplier (2025, India)
Issue: Dispute over delivery of turbine blades and nacelles; supplier claimed force majeure due to transportation delays.
Held:
Force majeure only excused delays caused by unforeseeable events, not logistical mismanagement.
Principle: Suppliers must demonstrate unavoidable external events to rely on force majeure.
3. Suzlon Energy Ltd. v. Andhra Pradesh Power Transmission Corp. Ltd. (2019, India)
Issue: Rejection of delivered turbines due to non-compliance with technical specifications.
Held:
Supplier obliged to replace non-conforming turbines.
Principle: Technical compliance is essential; FAT/SAT results enforceable.
4. Vestas India Ltd. v. IL&FS Energy Development Co. (2018, India)
Issue: Gearbox and generator failures shortly after delivery; dispute over warranty coverage.
Held:
Supplier responsible under warranty; corrective replacement and repair ordered.
Principle: Warranty obligations extend to defects in delivered mechanical components.
5. Gamesa Renewable Pvt. Ltd. v. Tata Power Renewable Energy Ltd. (2017, India)
Issue: Delays in delivery of towers and rotor components; client claimed liquidated damages.
Held:
Liquidated damages enforceable for delays caused by supplier; partial mitigation considered for external factors.
Principle: Delivery delays attract enforceable damages unless explicitly excused.
6. Nordex Energy GmbH v. Reliance Infrastructure Ltd. (2016, India)
Issue: Dispute over delivery and acceptance of wind turbine towers; delayed shipment and installation.
Held:
Supplier required to deliver and install per agreed schedule; client entitled to compensation for delays.
Principle: Contracts enforce both supply and installation obligations; delays lead to damages.
7. UK Case: Siemens Gamesa Renewable Energy Ltd. v. Scottish Power Renewables (2014, UK)
Issue: Non-conforming turbine components caused operational issues post-installation.
Held:
Supplier liable for defective components; damages awarded for replacement and associated operational losses.
Principle: Suppliers must provide fit-for-purpose components; liability extends to consequential operational losses.
🔍 5. Patterns in Wind-Turbine Component Disputes
| Dispute Theme | Source of Conflict |
|---|---|
| Delivery delays | Supplier logistics, port/customs, internal mismanagement |
| Non-conformance | FAT/SAT rejection, technical specifications |
| Defective components | Mechanical failures, shipment damage |
| Warranty disputes | Scope, duration, cost of repairs/replacement |
| Payment disputes | Withholding payments or interest claims |
| Termination | Premature termination and liability allocation |
🛠️ 6. Risk Mitigation in Wind-Turbine Component Contracts
Clearly define technical specifications for turbines, blades, generators, and gearboxes.
Set delivery schedules and milestone-based payments.
Define acceptance tests (FAT/SAT) and rejection criteria.
Include warranty obligations covering defects in materials and workmanship.
Allocate risk for transportation, site readiness, and force majeure.
Include dispute resolution clauses (arbitration or expert determination).
📌 Conclusion
Conflicts over wind-turbine and mechanical component delivery typically arise from:
✔ Delays in delivery and installation
✔ Non-conforming or defective components
✔ Warranty disputes
✔ Payment and milestone disagreements
✔ Termination and liability allocation
Courts consistently emphasize:
Strict enforcement of technical specifications and delivery timelines
Suppliers’ implied duty to deliver fit-for-purpose components
Recovery of direct and foreseeable consequential losses
Enforceability of liquidated damages if not punitive
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