In Brief
Uttar Haryana Bijli Vitran Nigam and another, power distribution licensees, challenged the Appellate Tribunal's award of compound interest on "carrying cost" (time-value-of-money compensation) to Adani Power following a Change in Law event requiring installation of Flue Gas Desulfurization equipment. The Supreme Court upheld compound interest, holding that Article 13.2 of the PPA embodies a restitutionary principle designed to restore an affected party to its original economic position. Since the power generator actually borrowed funds at compound interest, full restitution requires compound interest compensation. The Court dismissed the appeal, affirming that compound interest on carrying cost applies from the Change in Law date, not from adjudication date.
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