New Indian government drops DLA on Dabhol power project

DLA has had its role on the high-profile Dabhol power project arbitration terminated. It is understood DLA’s instruction from the Indian government was cancelled earlier this month following a change in government and the appointment of the new Indian Attorney General Milon Banerjee.

The new government has now embarked on an urgent search for replacement UK legal advisers.

A DLA spokesperson said: “Following the appointment of the new Attorney General, the entire legal team, including the Indian advisers, was replaced.” However, the spokesperson insisted that the firm was “still in dialogue with the Indian government”.

Indian firm Fox Mandal has been instructed on the matter, replacing Swarup as local government advisers.

General Electric (GE) and Bechtel, which joined Enron as promoters of the power project in Maharashtra, filed the estimated £5bn claim, understood to be the largest ever arbitration. They allege that the Indian government violated international law and an Indo-Mauritian investment treaty in failing to prevent the collapse of the operation.

Three eminent public international jurists will chair the arbitration: Dame Roslyn Higgins, a judge at the International Court of Justice, Professor Martin Hunter and the former New Zealand judge Lord Cooke.

However, the government is battling to locate a UK firm not conflicted out, and has been forced to request an extension of time to file certain statements, due on 30 September.

Eversheds indicated earlier this month that it would take the case for the government subject to approval from its client GE. However, GE refused to permit the instruction and the firm declined the invitation.

“We were never formally instructed and did no work on the case at all,” an Eversheds spokesperson said.

Meanwhile, Serle Court chambers’ Khawar Qureshi has been appointed as counsel for the government of India.

A raft of other UK firms have been invited to take India’s case, but it is understood that thus far the government has been unable to secure a UK law firm.

New York’s Simpson Thacher & Bartlett is advising GE and Bechtel on the arbitration.