CERC at the centre: India reasserts regulatory primacy

Gagan Anand
Legacy Law Offices, New Delhi

As the energy sector evolves, the laws that govern it must evolve faster.

This observation aptly frames a recent judicial development that is poised to reshape how India’s renewable energy disputes are interpreted and resolved. In November 2025, the High Court of Delhi delivered a judgment that has become a significant turning point for India’s power sector dispute resolution landscape. In ReNew Wind Energy (AP2) Pvt Ltd v Solar Energy Corporation of India,¹ the Court held that disputes arising from power purchase agreements (PPAs), particularly in the renewable energy sector, must be resolved exclusively through the statutory mechanism established under the Electricity Act 2003.

The Court reaffirmed the central role of the Central Electricity Regulatory Commission (CERC) in adjudicating or referring such disputes and clarified that parties cannot bypass this framework by invoking civil courts under the Arbitration and Conciliation Act 1996. This ruling strengthens regulatory coherence and has significant implications for investors, developers, regulators and dispute resolution practitioners as India continues to expand its renewable energy sector.

Factual background

ReNew Wind Energy (‘ReNew’), a major private wind power generator, entered into a PPA with Solar Energy Corporation of India (SECI), a Renewable Energy Implementing Agency (REIA) designated by the Ministry of New and Renewable Energy (MNRE) in 2018 for a 300 MW wind project located in Kutch, Gujarat. In May 2025, SECI alleged that ReNew had failed to meet its minimum energy supply obligation for the preceding year and, accordingly, signalled its intention to deduct corresponding amounts from future invoices. ReNew contested the allegation, asserting that the shortfall was attributable to events beyond its control and therefore covered by the force majeure clause provided in the signed PPA. In response to SECI’s allegations, ReNew filed a petition with the High Court of Delhi under section 9 of the Arbitration and Conciliation Act 1996 seeking interim relief. The petition alleged that the arbitration clause in the signed PPA permitted recourse to the Court for such interim measures before the constitution of an arbitral tribunal.

The legal issue: applicability of section 9 of the Arbitration and Conciliation Act 1996 in a regulated sector

The central issue before the Court was whether a party to a PPA governed by the Electricity Act 2003 could seek interim protection under section 9 of the Arbitration and Conciliation Act 1996 without first approaching the CERC. SECI maintained that the Electricity Act 2003 provides a comprehensive mechanism for resolving disputes between generating companies and licensees. Under section 79(1)(f), the CERC has the authority either to adjudicate such disputes or refer them to arbitration. In addition, it was argued that this statutory framework excludes the jurisdiction of civil courts for interim or ancillary relief. ReNew, however, relied on the arbitration clause in the PPA and argued that the general provisions of the Arbitration Act, including section 9, remained fully applicable and could be availed to seek relief in the event of a dispute between the parties.

The Court’s reasoning and decision

The Court accepted SECI’s position and dismissed the petition as not maintainable. The Court reaffirmed that where a dedicated statute such as the Electricity Act 2003 prescribes a streamlined mechanism for dispute resolution, that mechanism shall prevail over the general provisions of the Arbitration and Conciliation Act 1996. The Court also emphasised that the CERC’s authority under section 79(1)(f) includes not only the power to adjudicate the dispute but also the exclusive discretion to determine whether it should be referred to arbitration or not. The Court further observed that permitting parties to invoke section 9 of the Arbitration and Conciliation Act 1996 would undermine the statutory scheme by allowing them to circumvent the CERC and dilute the technical expertise that Parliament intended the CERC to provide. The Court therefore declined to grant interim protection and directed the petitioner to seek a remedy before the CERC.

Analysis and sectoral impact: a global shift towards regulatory-centric energy dispute resolution

This judgment reinforces a principle that is increasingly relevant in regulated sectors: contractual arbitration clauses cannot override statutory frameworks designed to ensure sectoral consistency and technical oversight. In India’s current power sector, the Electricity Act 2003 operates as a comprehensive code, regulating transmission, grid standards and dispute resolution. By reaffirming the exclusivity of the CERC’s jurisdiction, the Court brought clarity to an area in which stakeholders and industry leaders had often sought to rely on general arbitration law to obtain quicker interim remedies.

In practice, this decision shifts the litigation and arbitration strategy for renewable energy developers. Section 9 of the Arbitration and Conciliation Act 1996 has traditionally been an effective tool to prevent immediate adverse financial consequences arising from deductions or other unilateral actions across different sectors. As that route is no longer available, developers are compelled to depend solely on regulatory mechanisms, which may not invariably provide immediate interim relief. Given the financial sensitivities of renewable projects, typically backed by long-term, non-escalating tariffs and project finance structures, even temporary cashflow interruptions may trigger financing risks.

As India continues to integrate large volumes of renewable energy into its grid, there is an urgent need for dedicated dispute resolution mechanisms in the electricity sector. Globally, this trend is reflected in various jurisdictions, including the United States, where the PJM Interconnection, LLC v FERC case² provides a notable example of how energy market disputes, particularly those concerning transmission and tariffs, are primarily within the purview of regulatory authorities, such as the Federal Energy Regulatory Commission (FERC). While this decision does not categorically establish that all such disputes must be resolved by the FERC rather than through civil litigation, it reinforces the notion that specialised regulatory bodies play a central role in addressing complex energy sector issues. Similarly, in other jurisdictions, such as the European Union, legal precedents confirm that energy market disputes, especially those related to tariffs, transmission, interconnections and regulatory compliance, are generally managed by dedicated regulatory authorities. These cases suggest a broader, cross-jurisdictional shift towards resolving energy-related matters within regulatory frameworks rather than through traditional civil or commercial litigation channels. This global alignment underscores the need for technical expertise and consistent regulatory frameworks to support long-term confidence and stability in the energy sector. In that sense, the ReNew v SECI judgment not only clarifies domestic legal positioning but also places India firmly within the international movement towards regulator-led dispute resolution in the energy transition era.

Taken together, these examples highlight a growing global consensus that regulatory authorities rather than courts are best equipped to handle specific energy market disputes. This emerging trend underscores the importance of regulatory governance in shaping the resolution of such issues across different legal systems.

Balancing innovation and regulation: CERC’s critical role in energy reform

This decision also highlights the broader role of regulatory institutions in supporting national energy transition policies. India’s commitment to expanding its renewable energy capacity depends not only on investors and technological capability but also on the stability of contractual and regulatory frameworks. By strongly affirming the jurisdiction of the CERC, the Court has reaffirmed and reinforced the institutional architecture that underpins India’s renewable energy sector reforms. However, the decision also places additional responsibility on the CERC. As more renewable projects are commissioned and disputes increase, the CERC will need robust administrative capacity to ensure timely adjudication. Regulatory delay could undermine the very predictability and investor confidence that the current judgment seeks to reinforce.

Conclusion

The decision in ReNew Wind Energy (AP2) Pvt Ltd v Solar Energy Corporation of India serves as a significant marker in India’s ongoing effort to harmonise contractual autonomy with statutory regulation in the renewable energy sector. For the international legal community observing India’s regulatory evolution, this case illustrates the judiciary’s commitment to preserving the integrity of specialised statutory mechanisms in industries where uniformity, technical expertise and public interest concerns are significant.

For legal practitioners, the judgment provides clear guidance for developing dispute strategies in the renewable energy sector and highlights that such strategies must be shaped with the understanding that the CERC is the exclusive entry point for arbitration and related relief. For policy-makers and investors, the ruling reaffirms the significance of strong, capable regulatory institutions in sustaining the momentum of India’s clean energy transition.

As India continues to expand its renewable energy capacity and integrate complex grid-level technologies, the need for a harmonised regulatory and arbitration ecosystem becomes even more critical. This ruling represents a decisive step in that direction, fortifying the institutional backbone of the sector, reducing the risk of fragmented adjudicatory pathways and enhancing investor confidence in the stability of India’s energy market architecture.

Ultimately, the ReNew v SECI judgment contributes to a maturing regulatory landscape in which clarity, consistency and technical competence form the foundations of dispute resolution. It sets the stage for India’s power sector to evolve in a manner that is not only legally robust but also aligned with global best practices governing modern energy systems.

Notes

1 ReNew Wind Energy (AP2) Pvt Ltd v Solar Energy Corporation of India (2025) SCC OnLine Del 8252.

2 PJM Interconnection, LLC v FERC, 915 F3d 1030 (DC Cir 2019).