Tata Power share price turns green amid legal dispute with Adaro International over coal supply

Tata Power and Adaro International have entered into a legal conflict over a coal supply agreement, with both companies seeking compensation. The Tata Group company provided an update on the matter on Thursday, September 19, evening in an exchange document.

The dispute stems from a contract signed in August 2020 to supply high-calorific coal to Tata Power’s Trombay plant. Both sides have since exchanged notices of alleged breaches of the agreement.

Adaro, an Indonesian mining company headquartered in Singapore, has accused Tata Power of breaching its contract and is seeking $106 million (approx. ₹879.8 crore) in the arbitration. In response, Tata Power filed a counterclaim of US$ 229.94 million (approx. ₹1908 crore) for non-supply of coal.

“During the execution of the agreement, differences arose between the two parties. Adaro issued a notice alleging breach by TPCL, which was followed by an application for arbitration with an alleged claim of $106 million. To this, TPCL responded and raised counterclaims of $229.947 million for non-delivery as per the agreement,” Tata Power said in a regulatory filing.

Tata Power also stated that the arbitration process is still in its early stages. “The arbitration is currently in its initial stages and the constitution of the arbitral tribunal is yet to take place, i.e. the arbitrators nominated by the parties are yet to be approved by the ICC ICA and only after such approval will the process of appointment of the presiding arbitrator be initiated,” the company noted.

Despite the ongoing dispute, Tata Power confirmed that both parties were “in serious talks to resolve the dispute amicably.” However, the arbitration at the International Chambers of Commerce International Court of Arbitration (ICC ICA) will proceed as planned.

Tata Power has a large order book

At the same time, Tata Power’s subsidiary, Tata Power Renewable Energy, has secured a 400-megawatt hybrid project from Maharashtra State Electricity Distribution Company Limited (MSEDCL), making it the company’s largest renewable energy project in Maharashtra.

Additionally, Tata Power Renewable Energy has signed a Memorandum of Understanding (MoU) with Tata Motors to set up 200 fast charging stations for electric commercial vehicles across major cities in India.

In addition, Tata Power has commenced production of solar cells at its 4.3 gigawatt plant in Tirunelveli, Tamil Nadu, making it the largest single plant producing solar cells and modules in the country.