Suzlon unit can find new turbine partner, says court

The Bombay High Court ruled Suzlon Energy Ltd’s German unit could find a new partner to make its turbines in the south Asian country after Essar Group reneged on a licensing agreement, a lawyer for the unit said.

REpower Systems AG, the Hamburg-based unit of the country’s biggest wind-turbine maker, in 2006 licensed Essar, controlled by billionaires Shashi and Ravi Ruia, to produce its turbines exclusively in India until 2016. Essar took REpower to court last year after the German company terminated the agreement, saying Essar had failed to set up a plant, said Milanka Chaudhury, a partner at the Delhi-based law firm Link Legal, who represents REpower.

“For REpower, it means that they are now free to do more productive collaboration with somebody else and bring in the technology,” Chaudhury said by telephone.

Essar plans to appeal the ruling that was made yesterday. The High Court plans to post the ruling on its website tomorrow, the court library said in an email.

REPower and Essar agreed in 2006 to set up a joint venture that would produce the German company’s 1.5-and 2-Mw turbines in India for sale domestically and in Malaysia, Thailand and Vietnam. Essar said at the time it intended to invest Rs 500 million ($10.9 million) in a plant and start commercial production by mid-2007.

Essar agreed to pay REpower ¤6 million in license fees and a royalty of ¤17,000 per turbine in exchange for exclusive rights to produce the turbines in India up to 2016, said Chaudhury.

Suzlon acquired a controlling stake in Repower in May 2007.

The case is ARBPL/1291/2010 in the Bombay High Court.