Tata Power loses challenge to $490 million arbitration award

Tata Power Co., India's largest non-state power producer, has lost its attempt to challenge a $490 million arbitration award stemming from a dispute with investor Kleros Capital Partners over a proposed bid for a coal asset in Russia. The Singapore International Commercial Court dismissed Tata Power's objections to the damages awarded to Kleros and its claim that the majority of the arbitral order violated natural justice, according to a decision released on Wednesday.

The company has not yet commented on the ruling. The dispute began in 2013 when Kleros approached Tata Power to jointly bid for a Russian coal deposit estimated to have reserves worth $1.1 billion. A non-disclosure agreement was signed between the two companies for four years starting from September 2013. Tensions arose in 2015 over leadership of the bid and the project's ownership structure, leading to the dissolution of the partnership the following year.

Kleros did not participate in Russian auctions for the mine in December 2017 and ceased operations in the country. Tata Power submitted its own bid through a Russian subsidiary and won the mining license after the non-disclosure agreement had expired but subsequently surrendered it as the project proved unviable. Kleros subsequently filed arbitration proceedings, accusing Tata Power of breaching the non-disclosure agreements through misuse of confidential information and acting in bad faith to prevent Kleros from participating in the project.

The court upheld the award and rejected Tata Power's challenge on all grounds, ordering the company to pay Kleros unspecified costs.