Tata Power Company today disclosed a significant litigation involving Adaro International (Singapore) Pte. Limited. This disclosure, made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details the ongoing arbitration between the two companies over a coal supply agreement.
In August 2020, Tata Power and Adaro entered into a Coal Supply Agreement for the provision of high calorific value coal for Tata Power’s Trombay Power Plant. However, during the performance of the agreement, differences arose between the parties. Adaro issued a notice alleging a breach by Tata Power and subsequently requested arbitration, claiming USD 106 million in damages. In response, Tata Power raised counterclaims amounting to USD 229.947 million for non-supply under the agreement.
The dispute is currently under arbitration at the International Chambers of Commerce International Court of Arbitration (ICC ICA). The process is in its early stages, with the arbitral tribunal yet to be fully constituted. The parties are simultaneously engaged in serious discussions to amicably resolve the dispute, even as the arbitration proceedings move forward.
Due to the nascent stage of the arbitration, Tata Power has stated that the financial implications of the litigation cannot be crystallized at this time. The outcome will depend on the decisions made by the yet-to-be-constituted arbitral tribunal.
