Bangladesh HC bars Adani group from Singapore arbitration over power deal

Bangladesh's High Court on Thursday ordered India's Adani Group not to proceed with its planned international arbitration in Singapore over the payment dispute with state-run Power Development Board (BPDB) until an investigation into its power supply deal is completed.

The court officials said a two-judge High Court bench issued the order that the arbitration must remain suspended until a committee it appointed to scrutinise the power purchase agreement and investigate potential irregularities submits the findings.

The order came in sequence of a lawyer's petition, seeking the High Court's intervention for review of scrapping BPDB's agreement with Adani, calling it a "one-sided" deal signed during deposed prime minister Sheikh Hasina's regime.

The petition said Adani's power price is much higher than other regional sources, as electricity from Indian state-owned companies costs 5.5 taka per unit against 8.5 taka per unit by other Indian private companies, and from Nepal, it is 8 taka per unit, while power from Adani costs over 14 taka per unit.

The High Court order, however, came as the Bangladesh Power Development Board (BPDB) and Adani are still in negotiations over payment disagreements.

Bangladesh's interim government of Professor Muhammad Yunus, earlier, however, accused Adani of breaching the power purchase agreement by withholding tax benefits that the Godda plant got from India.

Bangladesh paid Adani a tariff of 14.87 taka (USD 0.122) per unit during the fiscal year to June 30, 2024, an amount higher than the average of 9.57 taka per unit for power supplied by other Indian companies.

Adani Power, earlier this month, said it has opted for an international arbitration process to resolve disputes over Bangladesh's power supply payments, as it is at loggerheads with BPDB over pending payments for the electricity it supplies as part of the contract signed in 2017.

"There are disagreements in the way certain cost elements are calculated and billed. Hence, both partners have agreed to invoke the dispute resolution process and are confident of a quick, smooth and mutually beneficial resolution," an Adani Group spokesperson said in a statement at that time.

Bangladesh's energy adviser, effectively a minister, Muhammad Fouzul Kabir Khan, also said that negotiations are still underway, but hinted both sides could move toward international arbitration if needed.

But the move prompted the petitioner, Supreme Court lawyer Abdul Kaiyum, to seek a High Court injunction to prevent the energy giant from proceeding with the arbitration.

"If Adani starts arbitration proceedings in Singapore over its dues before the investigation report is released, it will undermine the significance of the investigation. That's why we sought the injunction. There have been many irregularities in this agreement," he said.

Adani Power supplies electricity from its 1,600 megawatt coal-fired Godda power plant in eastern India that meets nearly a tenth of Bangladesh's power demands.