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Arbitrability Of Conflicts In India’S Green Hydrogen Bunkering Partnerships

Arbitrability of Conflicts in India’s Green Hydrogen Bunkering Partnerships

1. Introduction

India’s push toward green hydrogen as a maritime and industrial fuel has led to the emergence of green hydrogen bunkering partnerships, particularly in ports, shipping corridors, and industrial clusters. These partnerships typically involve:

Public sector port authorities

Green hydrogen producers

Shipping and logistics companies

Infrastructure developers

Technology licensors

Given the capital-intensive, technology-heavy, and regulatorily sensitive nature of these arrangements, disputes are inevitable. Arbitration is often selected as the dispute resolution mechanism, but the arbitrability of such conflicts depends on their legal character.

2. Meaning of Arbitrability Under Indian Law

A dispute is arbitrable if it:

Concerns rights in personam (private contractual rights), and

Is not reserved exclusively for courts or statutory authorities, and

Does not involve sovereign or public interest enforcement.

Disputes involving public safety, statutory compliance, or regulatory penalties are generally non-arbitrable.

3. Nature of Conflicts in Green Hydrogen Bunkering Partnerships

Common Conflict Categories

4. Legal Test for Arbitrability

Indian courts apply a composite test, asking whether:

The dispute affects only contracting parties, or

The dispute impacts public rights, safety, or statutory governance

Green hydrogen bunkering often involves hybrid disputes, combining private contracts with public regulatory obligations.

5. Key Case Laws on Arbitrability (At Least Six)

1. Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.

Principle Established:
Disputes concerning rights in personam arising from contractual relationships are arbitrable.

Application:
Hydrogen supply agreements, EPC contracts, and bunkering service agreements are arbitrable when disputes concern performance or payment.

2. Vidya Drolia v. Durga Trading Corporation

Principle Established:
A dispute is non-arbitrable if it:

Involves sovereign functions

Requires exclusive statutory adjudication

Affects public interest at large

Application:
Conflicts limited to private bunkering contracts are arbitrable; disputes involving port regulatory powers or environmental enforcement are not.

3. A. Ayyasamy v. A. Paramasivam

Principle Established:
Serious allegations alone do not bar arbitration unless they involve fraud of a public nature.

Application:
Misrepresentation of hydrogen purity, storage capacity, or safety performance can be arbitrated if confined to contractual misconduct.

4. National Thermal Power Corporation v. Singer Company

Principle Established:
Statutory duties and penalties imposed by law are non-arbitrable.

Application:
Penalties imposed by port or environmental authorities for hydrogen safety violations cannot be adjudicated by arbitrators.

5. Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd.

Principle Established:
Disputes requiring exercise of exclusive statutory powers are not arbitrable.

Application:
Decisions regarding licensing, port clearance, or statutory approvals for bunkering infrastructure fall outside arbitral jurisdiction.

6. Swiss Timing Ltd. v. Organising Committee, Commonwealth Games 2010

Principle Established:
Courts must adopt a pro-arbitration approach at the referral stage.

Application:
Courts should refer hydrogen bunkering contractual disputes to arbitration where a valid arbitration agreement exists.

7. Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan

Principle Established:
Disputes involving civil consequences and contractual obligations are arbitrable.

Application:
Claims for losses due to delay in commissioning bunkering terminals are arbitrable.

6. Public–Private Partnership (PPP) Context

Green hydrogen bunkering projects are often structured as PPPs, where:

Private disputes (cost overruns, performance guarantees) → arbitrable

Public law issues (environmental clearance, safety enforcement) → non-arbitrable

Courts may sever disputes, referring arbitrable issues to arbitration while retaining public law matters.

7. Environmental and Safety Considerations

Hydrogen bunkering poses high risks due to:

Explosion hazards

Cryogenic storage requirements

Port safety regulations

Disputes involving environmental damage, statutory safety violations, or emergency enforcement actions are non-arbitrable due to overriding public interest.

8. Arbitrable vs Non-Arbitrable Conflicts

Arbitrable

✔ Hydrogen supply and pricing disputes
✔ EPC and infrastructure delay claims
✔ Technology performance and warranty issues
✔ IP licensing disputes
✔ Indemnity and insurance claims

Non-Arbitrable

✖ Environmental penalties
✖ Port authority enforcement actions
✖ Licensing and approval disputes
✖ Criminal liability for safety breaches

9. Drafting Implications for Hydrogen Bunkering Agreements

To ensure enforceable arbitration:

Clearly define scope of arbitrable disputes

Exclude statutory penalties expressly

Provide expert determination for technical issues

Allocate safety and environmental risks contractually

10. Conclusion

Conflicts arising from India’s green hydrogen bunkering partnerships are largely arbitrable when they stem from private commercial contracts, including supply, infrastructure, and technology arrangements.

However, disputes involving environmental enforcement, port safety regulation, and statutory penalties remain non-arbitrable, as they implicate sovereign functions and public interest.

Summary Table

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