Tata Power’s longstanding legal dispute with Kleros Capital has returned to focus after a Singapore court rejected the company's challenge to arbitral awards issued last year.
The dispute stems from a non-disclosure agreement (NDA) signed between Kleros Capital and Tata Power in 2013. The parties had initially explored coal mining in Russia to source lower-cost coal for Tata Power's Mundra plant. However, the partnership subsequently broke down. Following the breakdown, Tata Power obtained the mining licence independently through a Russian subsidiary in 2018.
Alleging that Tata Power breached its confidentiality obligations under the NDA, Kleros Capital commenced arbitration proceedings in November 2020. Meanwhile, the coal exploration project pursued by Tata Power did not advance.
The tribunal ultimately held Tata Power liable for breaching the NDA and directed the company to pay USD 490 million in damages along with interest. In response, Tata Power appealed to the Singapore International Commercial Court (SICC) to set aside the Singapore International Arbitration Centre (SIAC) arbitral award. The SICC rejected the appeal, leaving Tata Power with 28 days to appeal the decision to the Singapore Court of Appeal (SCA).
Market analysts have estimated a provision of ₹6,000 crore, which amounts to approximately $650 million. This figure represents about 4 to 5 percent of the target valuation. Despite the financial and legal headwinds, brokerages have maintained a buy rating on the stock with a revised target price of ₹422, down from the earlier target of ₹444, factoring in FY26 actuals.
"This case highlights the critical importance of strictly adhering to confidentiality obligations and non-disclosure agreements during early-stage exploratory partnerships. Cross-border legal disputes can introduce unexpected financial liabilities that impact long-term corporate valuations. For growing enterprises and large corporations alike, robust governance, clear contract execution, and proactive risk mitigation are essential when navigating international collaborations and potential partnership dissolutions." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
