Tata Power Shares Fall Over 4% As Singapore Court Upholds $490 Million Arbitration Award

Mumbai, August 27: Tata Power shares fell as much as over 4% on Thursday to a seven-month low after the Singapore International Commercial Court dismissed the company’s challenge against a $490 million arbitration award in favour of Kleros Capital. As of writing the stock was down 3.9% at Rs 350 as investors assessed the potential financial implications of the ruling.

Singapore court rejects Tata Power challenge

The Singapore International Commercial Court on Wednesday dismissed Tata Power’s applications seeking to set aside the arbitration awards issued in favour of Kleros.

The arbitration dispute stems from a proposed joint bid involving a coal mining project in Russia. Kleros and Tata Power had entered into non-disclosure agreements in 2013 in connection with the proposed project.

Subsequent disputes over the proposed project eventually led Kleros to initiate arbitration proceedings in 2020.

$490 million award

An arbitral tribunal awarded Kleros around $490 million in damages.

Tata Power has said it intends to challenge the Singapore court’s decision. The company has 28 days from the judgment date to file its appeal.

Tata Power fell as adverse ruling scared investors. Source: NSE

The company had earlier challenged the arbitration award.

The dispute originated in 2013, when Kleros approached Tata Power with a proposal to jointly bid for a Russian coal deposit. The parties subsequently entered into non disclosure pact, but their relationship deteriorated amid disagreements over the project.

The collaboration eventually ended, after which Tata Power pursued the coal asset through its Russian subsidiary. Kleros later alleged that Tata Power had used confidential information and acted in bad faith to exclude it from the opportunity, leading to the arbitration proceedings.

For investors, the immediate focus is likely to remain on Tata Power’s appeal and the eventual resolution of the long-running dispute. The potential liability adds a significant legal overhang to the stock until there is greater clarity on the company’s ultimate financial obligation.

Source

•  https://www.nseindia.com/get-quote/equity/TATAPOWER/Tata-Power-Company-Limited