Tata Power brought three applications under the International Arbitration Act 1994 to set aside arbitral awards rendered by a Singapore-seated Tribunal. In the arbitration, Tata was found liable for breaching its contractual duty of good faith and non-disclosure agreements in relation to a project originated by Kleros to exploit a coal deposit in Kamchatka, Russia. As such, Kleros was awarded approximately US$490 million in “loss of chance” damages as well interest and costs. The Tribunal found that the breaches included Tata making several incorrect and misleading statements to Kleros “which led Kleros to believe that Tata had not disclosed confidential information to any third party, and which in turn led Kleros – being unaware of Tata’s true conduct – to continue dealing with Tata while Tata was in fact planning and making arrangements to push Kleros out of the picture and acquire the mining license for itself to the exclusion of Kleros.”
Tata’s challenges alleged that The tribunal had failed to decide essential issues of causation, remoteness and mitigation, and that the majority arbitrators had demonstrated apparent bias. The SICC dismissed all three applications in their entirety. On the natural justice challenges, the Court found that they were “in substance, an attempt by Tata to re-argue the merits of the case, which it is not entitled to do” and “the fact of analysis [by the Tribunal] and decision on the issue (and on Tata’s arguments) is plain for all to see.”On apparent bias, the Court held that “[s]horn of its frills, Tata’s case on apparent bias is no more than an unfounded apprehension that is ungrounded in evidence and unsupported by the findings and conclusions in the [awards].”
As a result, Tata Power is required to pay Kleros a sum now exceeding US$640 million, comprising damages and interest.
The SICC judgment is available here.
The Bloomberg article is available here.
The GAR article is available here.