Gourab Banerji, Senior Advocate, recently participated in a panel discussion titled “The Green Investment Playbook: De-risking Indian renewable energy investments, and cross-border opportunities in clean energy, energy storage and transmission assets,” held as part of Singapore Convention Week 2026. In this Beyond the Panel conversation with The Bar Bulletin, he reflects on some of the more difficult questions facing investors, developers and counsel as India’s energy transition creates new categories of commercial and regulatory disputes.

Q1. As the energy transition creates projects and technologies for which there is limited historical precedent, are our conventional approaches to drafting energy contracts becoming inadequate? What should lawyers be thinking about today that may not even have been contemplated when the contract is signed?

The straightforward answer is yes, and

The conventional thermal Power Purchase Agreement (‘PPA’) operated in a comparatively simple risk environment. In comparison, renewable energy, hybrid projects, battery storage, and green hydrogen contracts are in a state of flux with multiple risks at different stages including force majeure, change in law, commercial hardship, land acquisition, grid connectivity, curtailment and climate-related risks. We are now drafting long term contracts for technologies whose performance, costs, and regulatory landscape will look nothing like what they do today. This demands a fundamentally different drafting philosophy at the early stages of negotiations.

The risks that current drafting inadequately addresses fall into four distinct categories. First, technology risk: battery storage systems degrade in ways that are difficult to model at contracting stage, including cycling life, calendar ageing, and capacity fade. Second, supply chain risk: a finite pool of contractors and equipment suppliers create bottlenecks that create delay and cost overruns. Third, curtailment risk: as solar, wind, and energy-intensive data centres make up a larger share of the grid, state load despatch centres are increasingly instructing must-run renewable generators to reduce output. Fourth, regulatory risk: Change in Law is no longer an exceptional event and a well drafted clause can set out how those risks can be allocated between parties.

An organizing framework for parties when drafting the contracts could be the Abrahamson principles i.e. risk should be placed with the party best able to control, foresee, mitigate, benefit from, or absorb it, not simply with whoever holds the weaker bargaining position. For example, battery degradation is difficult to predict across a fifteen-to-twenty-year asset life and parties must consciously decide at the drafting stage whether that risk sits with the OEM, the developer, or is shared through augmentation obligations. For technology-performance risks, the contract may build staged remedies into the structure: agreed testing procedures, an independent engineer, and a graduated response mechanism that addresses technical issues before they reach a full arbitral hearing. Parties may also explore Med-Arb clauses for dispute resolution.

Where project viability is uncertain at the time of signing, conditions precedent that suspend substantive obligations until demonstrable viability is confirmed can protect all parties. The question is whether the contract creates a framework within which parties can manage the unanticipated without immediately resorting to adversarial proceedings. Too few contracts in the Indian renewable sector currently do that.

Q2. In long-term infrastructure projects, disputes often arise not because one party has clearly breached the contract, but because the commercial assumptions on which the contract was built have changed. How should tribunals approach the tension between holding parties to their bargain and recognizing that the energy market itself may have fundamentally changed?

In such contracts, it is not uncommon to find that

Commercial realities can create an uncomfortable gap between an aggrieved party and its available remedies. As discussed in the Panel, at the legislative level, the UNIDROIT-ICC project is currently developing model provisions on hardship, change in law and force majeure. Clause 6.2.3 of the UNIDROIT Principles on International Commercial Contracts (UPICC) envisions that the default remedy should be re-negotiation rather than termination and gives tribunals power to adapt or terminate contracts. At the drafting stage, written notice requirements, obligation to continue performance during re-negotiation, genuine hardship clauses that specify triggers and impose structured re-negotiation obligations make for some sound choices.

Tribunals dealing with such cases simply cannot operate with the kind of rigidity that was once possible with conventional energy contracts. They will have to possess domain expertise in renewable energy and be aware of its unique commercial realities to deal with technically complex energy disputes. In the long run, a concentrated effort to train arbitrators may also be desirable.

The starting point, as always, must remain the contract itself. The tension really arises where Change in Law, Force Majeure, Dispute Resolution and related clauses do not provide an answer and the commercial assumptions have fundamentally shifted. Should a tribunal then stick to the contract to create a legally sound but commercially indefensible outcome or depart from the contract to correct a commercially difficult outcome? Of course, ready departure from the contract does not send the right signal to the wider energy sector. Unless such compelling conditions exist, contracts are not re-negotiable simply because of shift in circumstances and rise in cost of capital. After exhausting interpretations of clauses, tribunals may rely on implied terms and business efficacy. Reliance on expert evidence, project records, reference to mediation (when the request is essentially for re-negotiation), valuation methodologies and enforcement considerations may also form the backbone of a tribunal’s considerations. Ultimately, the quality of the arbitral process will determine whether India’s renewable energy ambitions are supported or undermined by the disputes it inevitably produces.

Q3. With renewable projects increasingly involving multiple layers of developers, lenders, EPC contractors, operators, offtakers and public authorities, does the traditional two-party model of arbitration still work effectively? Are we likely to see more complex multi-party disputes and if so, is the Indian arbitration framework equipped to deal with them?

A modern renewable energy project binds developers, EPC contractors, lenders, offtakers, operators, and public authorities into a single commercial enterprise through a series of interlocking but legally separate bilateral contracts — each with its own arbitration clause, its own seat, potentially its own governing law. When a dispute arises, the underlying facts are common but the proceedings fracture across multiple tribunals and forums.

The Arbitration and Conciliation Act, 1996, contains no express mechanism for consolidating related arbitrations or compelling joinder of non-signatories. Ad hoc proceedings, still predominant in domestic arbitrations, operate without the institutional rules that might otherwise address the issue. The Indian arbitration framework has improved consistently through legislative amendments and judgments of the Supreme Court and various High Courts, which have provided a principled statutory foundation for many of the ambiguities this area of law once suffered from.

One issue that parties must confront before any multi-party arbitration question arises is whether the dispute is arbitrable at all under Indian energy law. The Electricity Act, 2003 operates alongside, and being the special law, even overrides the Arbitration and Conciliation Act, 1996 in some critical aspects. The nature of dispute (tariff versus non-tariff) and jurisdiction (Central or State Electricity Regulatory Commission) under the 2003 Act will affect who will decide the dispute and the maintainability of a Section 11 petition under the 1996 Act. While the question of law on arbitrability remains open following the order of the Hon’ble Supreme Court in Solar Energy Corporation of India v. Continuum Power Trading (SLP (C) 15096-97/2024), counsels advising on renewable energy projects must understand this legal framework before a dispute arises, not after. The wrong clause can send an entire dispute to a forum neither party intended.

At the transactional level, developers, lenders, and counsel must structure multi-party dispute resolution frameworks at the financing stage — umbrella arbitration clauses spanning related contracts, agreed institutional rules with consolidation provisions, a common seat. The sophistication to do this exists in the Indian market. What we need is the commitment to insist on it before commercial difficulties overtake caution.