Singapore Court Upholds Arbitral Award Against Tata Power
The Singapore International Commercial Court (SICC) has upheld an arbitral award requiring Tata Power Company Limited to compensate investment advisory firm Kleros Capital Partners Limited with $490.32 million. The decision, rendered by a bench comprising Justice S Mohan and International Judges Anthony Besanko and Anthony Meagher, dismissed Tata Power’s challenge on grounds of natural justice breaches and alleged bias during the arbitration process.
Background of the Dispute
The conflict originates from two non-disclosure agreements signed between Tata Power and Kleros in 2013 and 2014. These agreements were part of discussions where Kleros approached Tata Power as a co-investor in a Russian coal extraction project. Kleros accused Tata Power of mishandling confidential information regarding the Krutogorovo deposit and bypassing Kleros’ economic interests. The deterioration of their relationship stemmed from disagreements over project control and equity participation. Eventually, Tata Power’s Russian subsidiary, FENR, secured the mining license in January 2018, but later deemed the project unfeasible and relinquished the license in 2022.
Arbitral Proceedings
Kleros initiated arbitration under the Singapore International Arbitration Centre Rules in November 2020. By September 2023, the arbitral tribunal concluded that Tata Power had violated its contractual obligations, misused confidential information, and acted in bad faith. Tata Power was found to have misled Kleros into continuing their dealings while secretly planning to acquire the license independently.
The tribunal set the project’s valuation at $1.0215 billion, determining that Kleros lost a 60% chance of successful project development. Consequently, Tata Power was ordered to pay $490.32 million in damages, in addition to approximately $8.29 million in legal costs and interest at an annual rate of 5.33%. Arbitrator AK Ganguli dissented on the damages, suggesting that Kleros should receive $13.5 million as negotiating damages instead.
Court’s Ruling on Tata Power’s Appeal
Appealing to the SICC, Tata Power argued that the arbitral majority neglected crucial issues such as causation, remoteness, and mitigation, and alleged bias against arbitrators Professor Lawrence Boo and Stuart Isaacs KC. The court dismissed these claims, noting that Tata Power’s arguments were attempts to revisit the merits of the arbitral decision.
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The SICC emphasized that its concern was not with the quality of the award’s analysis but its presence. The court confirmed that the tribunal had adequately considered causation and did not need to address each argument separately. Similarly, it found that remoteness and foreseeability were analyzed in conjunction with causation, negating any breach of natural justice.
The court also rejected the apparent-bias claim, stating that Kleros’ funder Omni Bridgeway’s involvement in unrelated arbitrations with the arbitrators did not constitute bias. The judgment described Tata Power’s bias argument as an unfounded apprehension lacking evidential support.
Legal Representation
Tata Power’s legal team included Senior Advocates Davinder Singh and Koh Swee Yen, along with representatives from Davinder Singh LLC, Wong Partnership LLC, and Prolegis LLC. Kleros Capital Partners was represented by Toby Landau KC, Calvin Liang Hanwen, and Rochelle Lim Rui-Qi from Duxton Hill Chambers.
