The Centre may have to cough up its liability to the Overseas Private Investment Corporation against the US tribunal award in respect of the Dabhol Power Company.

This is because the OPIC has a clause in its agreement with the Indian government on the DPC. The clause allows OPIC to claim damages if there is a case of national expropriation.

Senior government sources said the decision by an independent arbitration tribunal in the US asking OPIC to pay claims of $ 28.57 million each to Bechtel Power Corporation and GE as political risk cover for the two companies' investment in the DPC seemed difficult to contest.

They said since the tribunal had ruled that there had been a total expropriation in violation of the international law, OPIC could justifiably invoke the same clause in its discussions with India.

The clause is incidentally not specific to the DPC case but is put in regularly in almost all investments routed through OPIC, a US government agency which provides a political risk cover for any international project handled by a US-based company.

However the sources said the Centre had not heard from OPIC on the issue so far, and was not likely to take any step on its own as of now. They also said while the tribunal's award could not be challenged, there were other possible legal remedies available, which the Centre could explore.

They also said while the Centre was aware of the expropriation clause in its agreement with OPIC, given the nature of the developments over the years in DPC, there was little scope for doing things differently.

As of now, there are six ongoing arbitration cases involving the 2,144 MW project set up in Maharashtra in 1996. Of these, three are against the Maharashtra State Electricity Board, one is against the government of Maharashtra and the other two involve the central government.

The Washington DC-based tribunal award is significant, as OPIC does not have the right to challenge the verdict. The award is binding and has to be implemented within 30 days. This will put pressure on OPIC to recover the same from the Centre and the Maharashtra government.

Dabhol Power was promoted by Enron Corporation with a 60 per cent stake, along with a 15 per cent stake each by Bechtel Power Corporation and GE.