A long-standing dispute has persisted in Bangladesh over unpaid power supply bills (unresolved) owed to Adani Power. To resolve the matter, the Adani Group initiated arbitration proceedings in a Singapore court, but the High Court has now imposed a stay on that process.
The court stated that the arbitration will remain suspended until the committee it formed to investigate the legality and possible irregularities of the agreement between the Bangladesh government and the Adani Group submits its report. The order came on November 19, following a preliminary hearing before a High Court bench led by Justice Md Bazlur Rahman and Justice Urmi Rahman.
The dispute centers on $234 million in electricity bills between Adani Power and the Bangladesh Power Development Board (BPDB). Correspondence between the two parties has been ongoing for an extended period, but neither side has reached a resolution. Most recently, Adani sought to bring the matter to a Singapore arbitration tribunal, although BPDB had previously indicated it would not agree to such mediation.
Senior lawyer Barrister M Abdul Qayyum filed the application in the High Court, seeking a review or cancellation of the power purchase agreement with Adani. A legal notice was sent via registered mail on November 6, instructing the BPDB chairman and the energy secretary to review or cancel the one-sided power supply contract with Adani within three days.
Following the High Court’s order, Barrister Qayyum told reporters, “If Adani begins arbitration in Singapore over their dues before the investigation report is submitted, the significance of that investigation will be nullified. That is why we sought the injunction.” He added that the contract with Adani contained numerous irregularities.
Adani had invited BPDB to resolve the dispute over the unpaid electricity bills through arbitration in Singapore. However, BPDB did not accept the proposal, as an investigation into the power purchase agreements is ongoing in Bangladesh.
There have long been allegations that the contract with Adani Power was influenced politically during the tenure of the now ousted Awami League government. The legality of the agreement is currently under review by a high court-mandated committee, which has already uncovered extensive evidence of irregularities and corruption involving Adani Power. A preliminary report has been submitted to the government, with the final report expected by mid-December.
On November 2, BPDB sent a letter to the registrar of the Singapore International Arbitration Centre (SIAC) requesting a suspension of the expert appointment process for arbitration with Adani, citing ongoing corruption cases, the progress of the investigation committee, and the ongoing inquiries against the Indian group.
The letter stated that the dispute with Adani is highly complex and involves a significant financial amount. Considering Adani’s request, BPDB noted that the current situation is not suitable for sending the dispute to arbitration. A committee was formed under High Court orders to investigate allegations of irregularities in the power purchase agreement, and these allegations are related to Adani’s application. BPDB informed Adani of this on October 5 through a letter and requested additional time for the investigation, the letter to the Singapore court noted.
Amid ongoing court cases and investigations over the power purchase agreement, Adani sent BPDB a letter on October 31 demanding payment of the outstanding bill. The letter warned that failure to pay could lead to suspension of power supply in Bangladesh from November 11. The letter also noted that Adani has sent 20 letters since November 2024 seeking payment of the overdue amount.
In a letter to BPDB on October 27, Adani Power stated that of the total $496 million outstanding, $262 million is undisputed. The company noted that if BPDB fails to pay this undisputed amount, Adani has the contractual right to suspend power supply. BPDB has already made partial payments, with the remaining major portion expected to be settled within November.
The power purchase agreement links BPDB with a 1,600-megawatt power plant built by Adani in Godda district, Jharkhand, India. The 25-year contract’s terms were previously undisclosed. Following the ouster of the Awami League government on August 5, 2024, an international media outlet published the contract documents. The records reveal strict conditions for electricity imports and coal purchases, entailing substantial potential financial losses for BPDB. The contract’s stringent terms leave BPDB with limited options to exit the agreement.