Tata Power shares drop 4% after Singapore court dismisses $490 million arbitration challenge against Kleros Capital

Tata Group’s power generation and distribution company, Tata Power, shares declined 4% after the opening bell on Thursday, August 27, as investors focused on the Singapore International Commercial Court dismissing the company’s challenge against a $490 million arbitration award to Kleros Capital.

NSE data showed that Tata Power shares lost 4.06%, declining to an early market low of ₹349.20 apiece on Thursday’s market, in comparison to ₹364 apiece at the previous equity market close.

The company shares recovered some of their early market losses, trading 3.5% lower at around ₹351 apiece during the morning market session on August 27.

Although the Singapore court has dismissed the appeal on August 26, Tata Power now plans to submit another appeal against the latest order within the designated 28-day period, challenging the decision to uphold the arbitration award.

Why are Tata Power shares falling today?

Tata Power shares were declining on Thursday’s market as investors reacted to the latest court dismissal of the company’s appeal against the long-standing dispute between the company and Kleros Capital.

The dispute originated back in 2013 when Kleros approached Tata Power to jointly bid for a Russian coal deposit. As part of the deal, both parties signed a non-disclosure agreement (NDA) for four years, under which confidential information can be exchanged.

In 2015, the partnership became a negotiation ground for an equity stake in the project, which eventually led to the companies ending their collaboration in 2016.

Later in 2017, another auction for a mining license on the same Russian coal deposit was conducted, in which Kleros did not participate, but Tata Power, via its Russian subsidiary, submitted an independent bid and eventually won the same.

After this, Kleros Capital alleged that Tata Power misused confidential geological and economic data which was exchanged under the prior partnership agreement, due to which both parties decided to go to the Singapore International Arbitration Centre (SIAC).

What is arbitration?

Arbitration is a legally private method of solving disputes between two or more parties outside a court of law.

In this case, the SIAC tribunal ruled that Tata Power broke its agreements and acted in bad faith by misusing confidential information after the end of the partnership with Kleros Capital.

The ruling mentioned that Tata Power will have to pay a $490.32 million penalty for damages, and on top of that, 5.33% interest p.a., calculated from the end of November 2020, along with the legal costs of the period.

Tata Power challenged this arbitration award at the Singapore International Commercial Court, which was dismissed on August 26, 2020.

“The Singapore International Commercial Court has dismissed the company’s challenge, holding that there was no breach of natural justice or the fair hearing rule by the majority in arriving at the final award,” Tata Power informed the stock exchanges along with its intent to challenge the latest decision.

Tata Power share price trend

Tata Power shares have delivered more than 175% returns on their investment in the last five years, and over 42% gains in the last three years, according to NSE data. However, the stock has lost 7% in the last one year.

On a year-to-date (YTD) basis, the stock has lost 8% and was down 6.9% in the last one-month period. The exchange data also showed that the company's shares have lost 6.4% in the last five market sessions.

The company’s market capitalisation (m-cap) was at over ₹1.11 lakh crore as of the trading session on Thursday, August 27, 2026.