Tata Power has provided an important update regarding the ongoing arbitration proceedings with Kleros Capital Partners Limited. The latest developments, communicated on July 2, 2025, reveal a significant legal outcome that could impact the company’s financial position.
Tata Power received an arbitration award in a long-running dispute with Kleros Capital. The case, initiated by Kleros on November 30, 2020, has been under arbitration in the Singapore International Arbitration Centre (SIAC) since its commencement. After the completion of oral hearings in February 2024, the three-member tribunal issued its decision with a majority ruling (2:1), partially in favour of Kleros.
The tribunal awarded Kleros $490,320,000 in damages, along with an additional $8,289,020.46 to cover legal costs. Both amounts are subject to simple interest at a rate of 5.33% starting from the respective dates: November 30, 2020, for the damages, and July 1, 2025, for the costs.
The company is now assessing the full implications of this award, which comes as a major legal and financial challenge. Tata Power has confirmed that it is reviewing the award's contents thoroughly, and is considering all potential options, including challenging the decision if appropriate. While the company’s leadership has not yet disclosed further details, the arbitration outcome has raised concerns about its future financial liabilities.
In Q4FY25, Tata Power Company recorded a 24% year-on-year increase in consolidated net profit, reaching ₹1,306 crore, up from ₹1,045.6 crore in the corresponding quarter of the previous year. The company also demonstrated improved operational performance, with revenue rising by 7.9% year-on-year to ₹17,096 crore.
EBITDA for the quarter rose sharply by 39.2% year-on-year to ₹3,245.4 crore, reflecting greater operational efficiency. Additionally, operating margins improved to 19%, compared to 14.7% during the same period last year.
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The arbitration case between Tata Power and Kleros has led to a substantial ruling in favour of Kleros, with over $490 million awarded, including legal costs and interest. While the ruling is a significant setback, Tata Power remains committed to reviewing its options.
On July 3, 2025, Tata Power Company Limited share price opened at ₹400.00 on NSE, below the previous close of ₹406.65. During the day, it surged to ₹403.70 and dipped to ₹399.40. The stock is trading at ₹401.10 as of 9:17 AM. The stock registered a decline of 1.36%.
Over the past week, it has declined by 1.90%, over the past month, it has moved up by 2.52%, and over the past 3 months, it has moved up by 4.62%.
The arbitration award marks a critical moment for Tata Power, with the company facing financial challenges stemming from the $490 million ruling. The company’s next steps, including potential appeals, will be pivotal in shaping the future of this dispute. As Tata Power evaluates its legal options, stakeholders will await further updates on the company's handling of this situation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Jul 3, 2025, 10:42 AM IST
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