CHENNAI: Bangladesh’s High Court has on Thursday put a temporary stop to the Adani Group’s move to initiate arbitration in Singapore over a dispute linked to its 2017 power supply agreement with the Bangladesh Power Development Board (BPDB). The order pauses any steps toward international arbitration until a court-appointed committee completes an ongoing review of the contract and submits its findings.
The court’s intervention carries significant implications for both the power sector and cross-border investment. The Godda plant in India supplies roughly 10 percent of Bangladesh’s electricity demand, making the underlying contract crucial for system stability. Any prolonged stand-off could affect payment flows and complicate Bangladesh’s procurement planning, especially if the review raises questions about pricing or contractual compliance. The injunction also sends a signal to foreign investors that high-value energy deals signed in previous political cycles may face fresh scrutiny, potentially influencing the way new power purchase agreements (PPAs) or long-term supply agreements are negotiated.
The legal implications are equally important. Adani had sought to take its dispute with BPDB to the Singapore International Arbitration Centre (SIAC), citing a clause in the power purchase agreement that designates SIAC as the forum for resolving disagreements. By restraining the company from proceeding, the High Court has effectively placed the domestic review above the contract’s dispute-resolution pathway, at least temporarily. If the committee uncovers irregularities or recommends changes, Bangladesh could attempt to reopen parts of the agreement, altering the dynamics of any future arbitration or negotiations.
The case stems from a petition filed in Bangladesh challenging the fairness of the 2017 contract. The petitioner argued that the deal, struck under the previous government, imposed unusually high costs on Bangladesh and lacked adequate transparency. In response, the court formed a committee of experts to examine the agreement’s pricing structure, tax treatment and compliance with procurement norms. The bench stated that allowing arbitration to proceed before this review is complete would undermine the purpose of the inquiry.
Adani has maintained that the dispute is strictly contractual and should be resolved through SIAC, as specified in the agreement. The company has also argued that Bangladesh’s courts do not have jurisdiction over the arbitration process. Bangladesh’s legal representatives and the petitioner, however, contend that the contract requires closer scrutiny and that any international legal action should wait until the committee finishes its work.
The court has not provided a firm deadline for the committee’s report, leaving the arbitration question in limbo for now. Both sides are expected to maintain power supply and payment arrangements while the legal process continues, but the dispute adds a new layer of uncertainty to an already sensitive cross-border energy partnership.