APTEL Clarifies but Does Not Reopen, The Arbitrability Question Under Section 79(1)(f): Review Petition No. 6 of 2026

Tata Power Company Limited v. Gujarat Urja Vikas Nigam Limited & Ors., Review Petition No. 6 of 2026 decided on 17 September 2026 

The Dispute

Tata Power sought review of Appellate Tribunal’s common judgment dated 25 February 2026 in Appeal Nos. 348 of 2025 & Batch. Tata Power contended that the judgment under review had described paragraph 36 of the Appellate Tribunal’s earlier judgment dated 28 August 2024 in Appeal No. 309 of 2019 (the DVC judgment) as a “stray sentence” and that conclusion of the judgment under review that only disputes falling within clauses (a) to (d) of Section 79(1) can be adjudicated by the Central Commission or referred to arbitration under Section 79(1)(f) was directly contrary to the DVC judgment of a coordinate bench, which the Judgement under Review could not dilute.

Paragraph 36 of the DVC judgment had recorded that non-tariff disputes involving a generating company or a distribution licensee do not fall within clause (f) of Section 79(1) and are thus arbitrable. The challenge to DVC judgment was dismissed by the Hon’ble Supreme Court in Civil Appeal No. 10480 of 2024.

The Law on Review

The Appellate Tribunal restated the settled position under Section 114 and Order XLVII Rule 1 CPC: an error apparent on the face of the record is one that is self-evident and not one established by a long-drawn process of reasoning, review corrects a patent mistake but does not substitute a view and a review petition cannot become an appeal in disguise.

Findings on the Substantive Ground

The Appellate Tribunal declined to disturb the reasoning of the judgment under review. The Appellate Tribunal held that since the Central Commission can adjudicate only disputes falling under clauses (a) to (d) of Section 79(1), its referral power is confined to the same category. The identically worded second limb of Section 86(1)(f) was read in the same manner, the Appellate Tribunal noting that a contrary construction would create concurrent referral jurisdiction between the Central and State Commissions and would permit a State Commission to refer disputes falling wholly outside its State.

On Renew Wind Energy (AP2) (P) Ltd. v. Solar Energy Corporation of India, 2025 SCC OnLine Del 8252, the Appellate Tribunal held that the Hon’ble High Court’s attention had not been drawn to Hindustan Zinc Ltd. v. Ajmer Vidyut Vitran Nigam Ltd., (2019) 17 SCC 82 and that the Appellate Tribunal was bound to follow the Hon’ble Supreme Court.

The Appellate Tribunal held that the judgment under review does not contradict the DVC judgment but is clarificatory of it, explaining its actual purport and observed that the clarification “ought to have been given in the DVC judgment itself”.

The Appellate Tribunal recorded its disapproval at paragraph 36 of the DVC judgment being characterised as a “stray sentence”, holding that the paragraph contained the final view of the Appellate Tribunal on arbitrability and that without it the DVC judgment would be inchoate. That characterisation was held to be an error apparent on the face of the record and those observations alone were set aside. The review petition was thereafter dismissed.

APTEL rules on Section 79(1)(f) of the Electricity Act, 2003: No Automatic Reference to Arbitration in Composite PPA Disputes

In a landmark judgment dated 25.02.2026, the Appellate Tribunal for Electricity (Appellate Tribunal) has ruled in favour of the Punjab State Power Corporation Limited (PSPCL) and the Haryana Discoms (UHBVNL and DHBVNL, through HPPC), setting aside the order passed by the Central Electricity Regulatory Commission (CERC).

The CERC, in its common order dated 19.11.2025, had directed that the disputes between the procurers and Tata Power Company Limited (TPCL) regarding the short-supply of contracted electricity be mandatorily resolved through arbitration. By allowing Appeal Nos. 371 and 400 of 2025 filed by the Haryana Utilities and PSPCL respectively, the Appellate Tribunal has reaffirmed the exclusive adjudicatory jurisdiction of the Regulatory Commissions over matters impacting public interest and tariff. 

1. Impermissibility of Splitting Causes of Action

One of the central issues in the appeals filed by PSPCL and HPPC was the CERC’s erroneous decision to bifurcate their petitions. Both utilities had sought compensation jointly and severally against TPCL and the Western Regional Load Despatch Centre (WRLDC), a statutory body. PSPCL and HPPC’s grievance was that while TPCL illegally ceased generating and supplying their contracted capacities (475 MW for PSPCL and 380 MW for HPPC), WRLDC failed in its statutory duty under Section 28 of the Electricity Act to ensure proportionate scheduling.

The CERC had attempted to refer the dispute against TPCL to arbitration, while leaving the procurers to file separate petitions against WRLDC.

Relying on the Supreme Court’s rulings in Sukanya Holdings and Vidya Drolia, the Appellate Tribunal held that Section 8 of the Arbitration & Conciliation Act, 1996 does not permit the bifurcation of a cause of action or the splitting of a suit between parties to an arbitration agreement (TPCL) and non-parties (WRLDC). Because WRLDC discharges statutory functions making disputes against it non-arbitrable, and since the monetary claims were joint and several against TPCL and WRLDC. 

2. Strict Compliance with Section 8 of the Arbitration & Conciliation Act, 1996

The Appellate Tribunal also ruled on the procedural mandates of the Arbitration & Conciliation Act, 1996 (the “1996 Act”). The Appellate Tribunal held that the provisions of Section 8(1) of the 1996 Act apply strictly to proceedings before the CERC.

Under Section 8(1), a party seeking to invoke arbitration must apply not later than the date of submitting its first statement on the substance of the dispute. In the present batch of cases, TPCL completely failed to make such an application before filing its reply to the petitions instituted by PSPCL and HPPC. Furthermore, TPCL had even filed its own independent petition before the CERC. The Appellate Tribunal held that non-compliance with the mandatory timeline under Section 8(1) vitiated the CERC’s decision to refer the dispute to arbitration.

3. CERC cannot refer a dispute to Arbitration if it lacks Adjudicatory Jurisdiction

The CERC had held that because the disputes were “non-tariff” contractual breaches, it lacked the jurisdiction to adjudicate them, and was therefore “bound” to refer them to arbitration under the second limb of Section 79(1)(f) of the Electricity Act.

The Appellate Tribunal rejected the CERC’s view that it could refer disputes to arbitration merely because it lacked jurisdiction to adjudicate them holding that the power to refer a dispute to arbitration is not independent of the power to adjudicate. Reaffirming the Hon’ble Supreme Court’s jurisprudence in GUVNL v. Essar, APTEL noted that the word “and” in Section 79(1)(f) must be read as “or”. This grants the CERC the discretion to eitheradjudicate a dispute or refer it to arbitration.

The Appellate Tribunal established that the CERC can only refer those disputes to arbitration which it is legally empowered to adjudicate under clauses (a) to (d) of Section 79(1). If the CERC lacks inherent jurisdiction to adjudicate a dispute, it simultaneously lacks the jurisdiction to refer that very dispute to arbitration.

4. Tariff and Regulatory Disputes are Non-Arbitrable

The Appellate Tribunal reiterated that the Electricity Act is a special enactment designed to protect public interest and consumers. Any dispute that concerns the regulatory functions of the Commission, or impacts the tariff of a generating company (either directly or indirectly), must be exclusively adjudicated by the Regulatory Commissions and cannot be relegated to a private Arbitral Tribunal.

By setting aside the CERC’s order dated 19.11.2025, the Appellate Tribunal has restored all petitions to CERC. The CERC is now directed to examine whether the subject matter of the disputes falls within the ambit of Section 79(1)(b) of the Electricity Act. If the disputes impact tariff or touch upon regulatory functions, the CERC is mandated to adjudicate them itself.

The judgment highlights the statutory limits on arbitral reference under Section 79(1)(f) of the Electricity Act, 2003 and clarifies the interface between the Arbitration and Conciliation Act, 1996 and the Electricity Act, 2003, reinforcing the primacy of regulatory adjudication in statutory disputes.

Judgment Link