Delhi HC tells Adani, Lanco to arbitrate their Udupi dispute1 min read . Updated: 20 Jan 2015, 12:52 AM IST
Adani Power alleges that Lanco they had not complied with their obligations under the share-purchase agreement for the Udupi power plants
New Delhi: The Delhi high court on Monday directed Adani Power Ltd and Lanco Infratech Ltd to arbitrate their dispute with regard to the sale of Lanco’s thermal power plant in Udupi (Karnataka) to Adani Power.
Adani Power’s lawyer Rajiv Nayar said his client will serve a notice for the appointment of an arbitrator within a week.
Adani Power had approached the high court against Lanco Infratech, Lanco Thermal Power Ltd, Udupi Power Corp. Ltd and others, alleging that they had not complied with their obligations under the share-purchase agreement entered into on 14 August even though Adani Power had paid an advance consideration of ₹ 125 crore to Lanco Infratech.
Adani had acquired Lanco’s 1,200 MW Udupi power plant for ₹ 6,000 crore. The coal-fired plant was set up in 2008 and sells 90% of its output to Karnataka and the rest to Punjab.
Acknowledging the arbitration clause in the agreement, Adani Power was seeking relief from the court, including a direction to restrain Lanco Infratech from terminating its agreement with Adani Power or even claiming that the agreement had been terminated at an earlier date. Adani was also seeking Lanco Infratech be restrained from dealing with, interfering, transferring, encumbering, alienating, selling, assigning or offloading any portion of its shareholding and interest under the share-purchase agreement.
In its reply filed on 15 January, Lanco denied all allegations. Justice S. Muralidhar said the parties were free to seek interim relief from the arbitral tribunal when it was constituted.
Adani Power declined to comment. Lanco could not be reached for comment.