In a regulatory filing on September 9, Reliance Infrastructure said the arbitration claim 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.
“The financial implication cannot be ascertained and is contingent upon the final outcome of arbitration and subsequent legal challenges,” Reliance Infrastructure said in its statement.
Reliance Infrastructure and Adani Transmission did not respond to an email sent till press time. On Friday, Reliance Infrastructure’s scrip ended at ₹162.45, down 9.90% on the BSE while Adani Transmission’s shares ended at ₹3,931.65 apiece, up 0.18%.
The Adani Group in 2017 had acquired R-Infra’s (then Reliance Energy) Mumbai power business including generation, distribution and transmission, in a ₹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.
Reliance Energy catered to close to three million consumers in Mumbai. The deal was intended to help Reliance Infra retire its ₹15,000 crore debt, leaving it with ₹3,000 crore of surplus funds. In the regulatory filing, the company did not disclose the nature of the alleged breach of contract.
MCIA aims to be India’s premier forum for commercial dispute resolution.