Delhi High Court Refuses Interim Relief to JLT Energy Against Hindustan Cleanenergy In Solar Deal Dispute

The Delhi High Court has refused to restrain Hindustan Cleanenergy Limited and its group companies from creating third-party rights in two solar power projects in Tamil Nadu and Bihar, holding that the share purchase agreements signed with a French investor had already come to an end on their own terms. Justice Purushaindra Kumar Kaurav, in an order dated January 6, 2026, said courts cannot use interim powers to keep a contract alive when the agreement itself provides for its termination When such a clause is triggered, unsigned emails and draft proposals cannot be used to suggest that the deal still survives. “Effect must be given to the word 'automatic' as it appears in Clause 5.6. If contingencies and carve-outs were to be read between the stage of a CP(s) not being fulfilled on CLSD and that of termination of the said Agreement, the word “automatic” would lose its meaning", the court said. The dispute centres on two share purchase agreements signed on December 31, 2024, by JLT Energy 9 SAS, part of the Technique Solaire Group. Under these agreements, JLT Energy agreed to acquire a 100 percent stake in two project companies that own and operate solar power plants, one in Tamil Nadu and the other in Bihar.Both project companies are owned and managed by Hindustan Cleanenergy group entities. The deals were linked, and closing the Tamil Nadu transaction was a mandatory precondition for completing the Bihar acquisition. A key requirement under the Tamil Nadu agreement was the conversion of project land from agricultural to non-agricultural use within a fixed timeline. The contracts clearly stated that if such conditions were not met by the closing long stop date, the agreements would “automatically terminate.” That land conversion approval never came through. JLT Energy argued that the parties had, through meetings and draft revisions, agreed to treat land conversion as something that could be completed later, with the deal closing subject to a holdback.It also accused the Indian companies of acting in bad faith by failing to secure approvals and then benefiting from their own default. On that basis, it sought an injunction to prevent the sellers from creating third-party rights in the project assets. The Hindustan Cleanenergy group companies countered that the contracts were never amended. They pointed out that all draft amendments were marked “for discussion purposes only,” were never signed, and therefore never became binding. The court agreed, noting that even JLT's own legal notice had asked for the amendment to be executed, which showed that no binding change had taken place.“The said Amendment document was non-binding, and contained sufficient textual indications of it being a mere discussion draft,” the court said. Rejecting the fault-based argument, the court held that the termination clause was unqualified and worked on its own force. “It would be unwise to rewrite the terms of the contract,” the court observed, adding that this was a commercial transaction deliberately structured to collapse if approvals were not obtained. Once the long stop date passed, the agreement had a built-in “self-collapsing mechanism,” and there was nothing left for the court to preserve. The court also ruled out specific performance, saying it could not enforce a contract that depended on government approvals.Doing so would indirectly compel public authorities, who were not parties to the agreement, to grant permissions. As a result, the court dismissed JLT Energy's plea for interim protection and declared that the share purchase agreements had automatically terminated on May 31, 2025. However, to protect JLT's claim for expenses incurred in maintaining a credit line for the transaction, the court directed the Hindustan Cleanenergy group companies to deposit Rs 3 crore or furnish a bank guarantee of the same amount before the arbitral tribunal within 15 days. The connected petition filed by the Indian companies was dismissed as infructuous.Case Title: JLT Energy 9 SAS v. Hindustan Cleanenergy Limited & Ors. and connected mattersCitation: 2026 LLBiz HC (DEL) 14Case Numbers: O.M.P.(I) (Comm.) 464/2025 and O.M.P.(I) (Comm.) 489/2025For JLT Energy: Senior Advocate Rajshekhar Rao with AZB & PartnersFor Respondents: Senior Advocate Jayant K. Mehta with Khaitan & Co. Click Here To Read/Download Order

Delhi High Court Refuses Interim Relief to JLT Energy Against Hindustan Cleanenergy In Solar Deal Dispute

Shivani PS

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