WHAT HAS HAPPENED ?
Anil Ambani's Reliance Infrastructure Ltd has filed an arbitration claim of Rs 13,400 crore ($1.7 billion) against Adani Transmission Ltd, For "breach of terms" in a deal to sell its Mumbai power distribution business, the former said in a regulatory filing.
ABOUT THE DEAL
The Adani Group in 2017 had acquired Reliance Infra's (then Reliance Energy) Mumbai power business including generation, distribution and transmission, in a Rs 18,800-crore deal.
The deal gave Adani Group a foothold in the distribution business, helping it transition from a generation and transmission company into a fully-integrated power utility.
Adani Transmission is India's largest private sector transmission and power distribution entity.
BUT WHY ANIL AMBANI SOLD ITS BUSINESS ?
Reliance Energy catered to close to three million consumers in Mumbai. The deal was intended to help Reliance Infra retire its Rs 15,000 crore debt, leaving it with Rs 3,000 crore of surplus funds.
VIOLATION OF THE AGREEMENT
Reliance Infrastructure said the arbitration claim, filed before the Mumbai Centre for International Arbitration (MCIA), Is over what is described as the breach of terms of its December 2017 share purchase agreement with Adani Transmission related to the transfer of its Mumbai power distribution business.
BUT WHAT EXACTLY IS THE ALLEGATION?
In the regulatory filing, the company did not disclose the nature of the alleged breach of contract.
The Mumbai Centre for International Arbitration (MCIA) aims to be India's premier forum for commercial dispute resolution.
"The financial implication cannot be ascertained and is contingent upon the final outcome of arbitration and subsequent legal challenges," Reliance said.
Adani Transmission (ATL) on Monday issued a statement in relation to arbitration dispute with Reliance Infrastructure Ltd. ATL said that, The claims of Reliance Infrastructure against it and its power distribution arm Adani Electricity Mumbai Ltd (AEML) are "afterthoughts and based on untenable positions".
Adani Electricity is following the due process under the share purchase agreement (SPA) for dispute resolution, it said in a regulatory filing.
Further, the company said that it will present the claims against Reliance Infra in arbitration proceedings.
The official release further said, "Reliance Infrastructure Ltd (R-Infra), part of the Reliance Anil Dhirubhai Ambani Group, initiated arbitration on one specific dispute under the Share Purchase Agreement (SPA) in December 2021."
"This was a claim for 500 Cr. This year, in February and August, R-Infra filed supplementary arbitration requests, raising additional disputes and claims."
COUNTER CLAIM
"Following due process, ATL/Adani Electricity rejected the R-Infra claim.
In addition, ATL/Adani Electricity submitted that R-Infra has not yet settled AEML's significantly larger claims under the SPA," the statement read.
