APTEL Lays Down Triple Test For An Event To Qualify As A Force Majeure Event

APTEL, by way of its judgment dated 16.03.2026 in M/s. Simbhaoli Power Private Limited v. Uttar Pradesh Electricity Regulatory Commission and Others¹, upheld the order of the Uttar Pradesh Electricity Regulatory Commission ("UPERC"), rejecting the claim of M/s. Simbhaoli Power Private Limited ("SPPL") for reduction of contracted capacity under its Power Purchase Agreement ("PPA") executed with Uttar Pradesh Power Corporation Limited ("UPPCL"). APTEL held that SPPL is not entitled to such reduction and that the sanctity of the PPA cannot be permitted to be breached on account of a commercial consideration taken by SPPL.

SPPL had dismantled a 12 MW generating unit on account of increase in cost and non-availability of bagasse and sought reduction of export capacity under the Force Majeure clause of the PPA. APTEL held that such circumstances are 'usual and natural events' which could have been foreseen at the time of execution of the PPA and do not constitute a Force Majeure event.