Reliance Infrastructure Ltd which is owned by younger Ambani announced in a regulatory filing that it has filed an arbitration suit against Adani Transmission Ltd for “breach of conditions” in an agreement to sell its Mumbai electricity distribution business for Rs 13,400 crore ($1.7 billion).
According to Reliance Infrastructure, the arbitration claim was made before the Mumbai Centre for International Arbitration (MCIA) and was related with a purported violation of the terms of the share purchase agreement it entered into with Adani Transmission in December 2017 which is concerned with the sale of its Mumbai power distribution business.
The petition by Reliance Infrastructure Ltd. stated that “the financial implication cannot be determined and is dependent upon the eventual result of arbitration and future legal challenges.”
In a deal worth Rs 18,800 crore, the Adani Group purchased Reliance Infra’s (previously Reliance Energy) Mumbai electricity business, which included generating, distribution, and transmission. Adani Group was able to move from being a generation and transmission company to becoming a fully integrated power utility thanks to the deal, which gave it a foothold in the distribution sector. The largest private sector transmission and distribution company in India is Adani Transmission.
In Mumbai, Reliance Energy served close to three million customers. The agreement was made to assist Reliance Infra in paying off its debt of Rs 15,000 crore and leave it with Rs 3,000 crore in extra cash. The nature of the alleged violation of contract was not disclosed by the corporation in the regulatory filing.
