Change in law compensation under PPAs includes carrying cost where restitution requires full restoration of the pre-change economic position.

Article 13 of the PPAs was construed to require tariff adjustment from the date of the change in law and to apply a restitutionary standard that restores the affected party to its pre-change economic position. On that reading, the entitlement to compensation arose from the contract itself, not from any free-standing equitable claim. Because reimbursement from the effective date was part of the contractual compensation mechanism, carrying cost was also included to ensure restitution was complete. The appellate decision was upheld, and the compensation regime was held to cover carrying cost for the delayed reimbursement period.

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Issues: (i) Whether the respondent was entitled to carrying cost on amounts payable under the change in law clause of the PPAs from the date of the change in law till the date of approval by the Commission.

Analysis: Article 13 of the PPAs made the tariff adjustment effective from the date of withdrawal of the exemption notifications and, by Article 13.2, embodied a restitutionary principle requiring restoration of the affected party to the same economic position as if the change in law had not occurred. The entitlement was therefore traceable to the contract itself and not to any free-standing equitable claim. The change in law compensation mechanism, read as a whole, required monthly tariff adjustment from the effective date, with carrying cost following because restitution would otherwise be incomplete.

Conclusion: The respondent was entitled to carrying cost under the PPAs.

Final Conclusion: The impugned appellate decision was upheld and the appeals failed, with the compensation regime under the PPAs being construed to include carrying cost as part of contractual restitution.

Ratio Decidendi: Where a change in law clause expressly adopts a restitutionary standard to restore the affected party to its pre-change economic position, carrying cost for the period of delayed reimbursement forms part of the contractual compensation mechanism.

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