Singapore court upholds damages awarded to Kleros Capital Partners in dispute over failed Russian coal project. Tata Power has lost its challenge to a $490 million arbitration award in favour of Kleros Capital Partners, with a Singapore court upholding the damages arising from a dispute over a Russian coal project.
The Singapore International Commercial Court on Wednesday dismissed Tata Power's challenge to the arbitral award and rejected its contention that the majority decision had breached principles of natural justice. The court also ordered Tata Power to pay Kleros' legal costs, with the amount to be determined separately.
Dispute Dates Back To 2013
The dispute originated in 2013, when Kleros proposed jointly bidding with Tata Power for a coal deposit in Russia that it estimated contained reserves worth about $1.1 billion. The two parties entered into a non-disclosure agreement effective for four years from September 2013. Their relationship subsequently deteriorated over disagreements concerning leadership of the proposed bid and the project's ownership structure, and the collaboration ended in 2016.
Kleros did not participate in Russian federal auctions held in December 2017 and later wound down its operations in the country. Tata Power subsequently bid for the coal asset through a Russian subsidiary after the non-disclosure agreement had expired and secured the mining licence. It later surrendered the licence after determining that the project was not commercially viable.
Tribunal Awards $490 Mn In Damages
Kleros initiated arbitration proceedings against Tata Power, alleging that the company had improperly used confidential information and acted in bad faith to exclude it from the project. The arbitral tribunal awarded Kleros approximately $490 million in damages. Tata Power challenged the award before the Singapore court, disputing the damages as well as the validity of the tribunal's majority decision. The court rejected the company's arguments and upheld the arbitration award, leaving Tata Power liable for the $490 million award as well as Kleros' legal costs.
(Bloomberg inputs)