Bhubaneswar: A staggering 36-fold difference in damages awarded by an arbitration tribunal has intensified scrutiny of Tata Power’s legal battle with Kleros Capital Partners, raising questions over fairness, alleged bias and the valuation of a project that never materialised.
The Singapore court’s recent enforcement order has escalated the dispute, authorising the seizure and sale of Tata Power’s shares in two Singapore subsidiaries to satisfy an arbitration award exceeding US$650 million, according to Kleros. However, as experts maintain, enforcement does not settle the questions at the heart of Tata Power’s appeal, which remains pending before Singapore’s Court of Appeal.
In July 2025, a majority of the three-member tribunal awarded Kleros US$490.32 million, plus interest and costs, for the alleged loss of an opportunity to participate in a proposed Russian coal project.
The Indian arbitrator dissented, finding that the evidence did not establish Tata Power had deprived Kleros of that opportunity. He proposed US$13.5 million in negotiating damages instead.
The majority’s award was more than 36 times the dissenting assessment, raising a fundamental question: how did an unrealised commercial opportunity translate into damages of such magnitude?
Former Attorney General Mukul Rohatgi has publicly questioned the legal and commercial basis of the damages calculation. Former Supreme Court judge Justice Vineet Saran has also raised concerns about an award that reportedly relies on projected future returns rather than actual project execution or investment.
Justice Saran clarified that he had not examined the complete case record. His observations, therefore, constitute public legal commentary and not a judicial finding.
Tata Power has additionally challenged alleged non-disclosures involving two majority arbitrators and connections linked to Kleros’s third-party funder. The company argued that these circumstances gave rise to apparent bias. The allegations have not been judicially established.
The Singapore International Commercial Court (SICC) dismissed Tata Power’s applications in August 2026, finding that the evidence did not meet the legal threshold for setting aside the award. Tata Power has appealed that decision.
The tribunal had unanimously found Tata Power liable for breaches of the parties’ agreements in 2023. The company did not challenge that liability award. Its subsequent challenge focused on damages and alleged procedural and impartiality issues.
Kleros has said the appeal does not automatically stay enforcement, creating immediate commercial consequences for Tata Power. However, enforcement is distinct from a final appellate determination.
The controversy, according to experts, raises broader questions about how arbitration tribunals value hypothetical opportunities and assess damages when projects never materialise.
With enforcement authorised but the appeal unresolved, Singapore’s highest court faces a dispute that could have significant implications for international arbitration. The award has been upheld at first instance, but its final appellate fate remains uncertain.
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