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Bangladesh court stops arbitration with India’s Adani Power for dues

The Bangladesh High Court halted arbitral proceedings on Wednesday between India's Adani Power and Bangladesh's power board over disputes regarding power supply payments.

The Bangladesh Power Development Board and the company led by Indian billionaire Gautam Adian have been in dispute over unpaid electricity bills as part of an agreement that both parties signed in 2017.

Adani and BPDB decided early this month to use an international arbitration process in order to settle disputes regarding Bangladesh's electricity supply payments.

The court announced on Wednesday that arbitration would be suspended until a report is received from a committee formed by the high court to investigate fairness and any possible irregularities of the agreement between Bangladesh's government and Adani Group.

Last year, the Bangladesh High Court ordered that a group of experts examine the contract between Adani and Bangladesh.

Adani Power provides electricity from its 1,600 megawatt coal-fired Godda power station in eastern India. This plant meets almost a tenth the power needs of Bangladesh.

Abdul Qayyum told reporters that if Adani begins arbitration proceedings in Singapore before the report is released, the investigation would be of no value.

In December, the interim government of Bangladesh accused Adani for breaching the power-purchase agreement by refusing tax benefits to the Godda Plant that India had provided.

Adani received a tariff from Bangladesh of 14,87 takas ($0.1220), per unit, during the fiscal period ending June 30, 2024. This was higher than the average 9.57 takas for power supplied by Indian companies.

A spokesperson for the Adani Group said that the company had yet to review the court order. However, according to the agreement, any dispute between the parties must be resolved by the Singapore International Arbitration Centre which is outside the jurisdiction of Bangladeshi courts.

BPDB didn't immediately respond to a comment request. Reporting by RumaPaul and SethuramanNR; Editing Maju Samuel

(source: Reuters)