Tata Power's stock dropped significantly after failing to overturn an arbitration award favoring Kleros Capital Partners. The case originates from a 2013 joint bid for a Russian coal project, which soured due to partnership disagreements. Tata Power proceeded independently after the partnership dissolved, leading Kleros to sue for breach of contract and misuse of confidential information. A tribunal ruled in favor of Kleros, and subsequent challenges by Tata Power were dismissed by the Singapore International Commercial Court. The company now faces a substantial financial obligation of over $640 million, significantly impacting its profitability and investor confidence.

Tata Power's stock dropped significantly after failing to overturn an arbitration award favoring Kleros Capital Partners. The case originates from a 2013 joint bid for a Russian coal project, which soured due to partnership disagreements. Tata Power proceeded independently after the partnership dissolved, leading Kleros to sue for breach of contract and misuse of confidential information. A tribunal ruled in favor of Kleros, and subsequent challenges by Tata Power were dismissed by the Singapore International Commercial Court. The company now faces a substantial financial obligation of over $640 million, significantly impacting its profitability and investor confidence.

Tata Power's stock dropped significantly after failing to overturn an arbitration award favoring Kleros Capital Partners. The case originates from a 2013 joint bid for a Russian coal project, which soured due to partnership disagreements. Tata Power proceeded independently after the partnership dissolved, leading Kleros to sue for breach of contract and misuse of confidential information. A tribunal ruled in favor of Kleros, and subsequent challenges by Tata Power were dismissed by the Singapore International Commercial Court. The company now faces a substantial financial obligation of over $640 million, significantly impacting its profitability and investor confidence.

Tata Power Company, one of India’s largest private-sector power producers, fell more than 4 per cent in early trading on Thursday. The slip came after the company lost its challenge to an arbitration award in favour of international investment firm Kleros Capital Partners. The award was granted to Kleros following a dispute with Tata Power concerning a proposed coal bid in Russia. 

The stock tumbled by 4.18 per cent to reach an intraday low of ₹348, close to its 52-week low of ₹342.35. While the BSE Sensex also slipped 0.32% to around 77,228 as of 12:03 pm, the stock’s downfall largely stems from its legal battle with Kleros. 

In 2013, both companies signed a four-year non-disclosure agreement (NDA) to jointly bid for the Kurtogorovo coal project in Russia. However, the relationship slowly disintegrated in 2015, fueled by disagreements over who would lead the bid and the ownership structure. The partnership ended the following year. 

Subsequently, Kleros did not bid for the mine in Russia in 2017 and discontinued its operations in the country. However, Tata Power waited for the NDA to expire and bid independently through its Russian subsidiary. The company secured the mining licence, though it was later surrendered after deciding the project was not feasible. 

This led Kleros to initiate arbitration proceedings, alleging that Tata Power had breached the NDA. The investor claimed that the company had acted in bad faith and misused confidential information for its profit. In July 2025, the tribunal granted Kleros the award. 

Following this, Tata challenged the award, alleging “arbitral bias” and questioning the quantum of damages. However, the Singapore International Commercial Court on Wednesday dismissed all challenges raised by the company and imposed a 5.33 per cent annual interest on Tata Power. 

The company now faces a massive financial liability of over $490 million. Along with interest accumulated since 2020, Tata Power has to pay Kleros over $640 million. As of now, the company has not paid any part of the award and will accrue interest as it delays. 

The payout is roughly equal to Tata Power’s consolidated annual net profit for FY2026, around $536.6 million. The company keeps missing investor expectations, with the net profit in Q1FY27 at $29.05 million, which is a year-on-year decrease of 46.67 per cent from $54.49 million in Q1FY26.