Tata Power shares rise as legal dispute with Adaro International over coal supplies

Tata Power and Adaro International are locked in a legal dispute over a coal supply agreement, with both companies seeking compensation. The Tata Group company provided an update on the case in an exchange filing late Thursday, September 19.

The dispute stems from a contract for the supply of high calorific value coal to Tata Power’s Trombay power plant signed in August 2020. Since then, the two parties have exchanged notices regarding alleged breaches of the contract.

Singapore-based Indonesian mining company Adaro has accused Tata Power of breach of contract and is seeking $106 million in damages. ₹In response, Tata Power filed a counterclaim for $229.94 million (approximately ₹190.8 billion rupees were lost due to insufficient coal supply.

“During the performance of the agreement, differences arose between the parties. Adaro filed a notice alleging breach of contract by TPCL and subsequently filed an arbitration claim for an alleged amount of $106 million. TPCL responded with a counterclaim of $229.947 million for non-supply of power as per the agreement,” Tata Power said in a regulatory filing.

Tata Power also said that the arbitration process is still at an early stage. The company pointed out: “The arbitration is currently in its early stages and the arbitral tribunal has not yet been constituted, that is, the arbitrators nominated by the parties have not yet been confirmed by the ICC ICA. Only after confirmation will the appointment process of the presiding arbitrator be initiated.”

While the dispute is ongoing, Tata Power confirmed that the parties have been in “serious discussions to resolve the dispute amicably”. However, the arbitration before the International Chamber of Commerce International Court of Arbitration (ICC ICA) will proceed as planned.

Tata Power receives large order

Meanwhile, Tata Power’s subsidiary Tata Power Renewables has bagged a 400 MW hybrid project from the Maharashtra State Electricity Distribution Company Limited (MSEDCL), the company’s largest renewable energy project in Maharashtra.

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

Additionally, Tata Power has started manufacturing solar cells at its 4.3 GW plant in Tirunelveli, Tamil Nadu, which is the country’s largest single-location solar cell and module manufacturing facility.