Bangladesh Appoints UK Law Firm for Arbitration Against Adani; Niko to Pay $42M Compensation

Bangladesh has appointed a UK-based law firm, 3 Verulam Building, to represent the Bangladesh Power Development Board (BPDB) in the ongoing international arbitration against Adani Power Limited. The case, which centers around a dispute over coal pricing and power tariffs, is being heard at the Singapore International Arbitration Centre (SIAC). BPDB Chairman Md Rezaul Karim confirmed the development, stating that the law firm’s nominees had been submitted to SIAC.

The appointed firm is led by King's Counsel Farhaz Khan, who has been advising the National Review Committee for several months. BPDB has also selected two local experts: Rezwan Khan, Chairman of Power Grid Bangladesh, and barrister Ehsan Abdullah Siddiq, a partner at The Law Counsel, to assist the King's Counsel.

This arbitration follows a 25-year power purchase agreement signed between BPDB and Adani Power in 2017, which involved the import of 1,496 MW of electricity from Adani's coal-fired plant in Jharkhand, India. The dispute concerns Adani's pricing of coal, which Bangladesh claims is excessively high and inflating electricity generation costs. Despite numerous online meetings, negotiations between the two parties have not yielded a solution, leading to the initiation of arbitration by Adani.
 

In a separate case, Niko Resources has been ordered to pay Bangladesh $42 million in compensation for the Chhatak gas field blowouts that occurred in 2005. The decision came from the International Centre for Settlement of Investment Disputes (ICSID), although Bangladesh had originally sought close to $1 billion in damages. Petrobangla officials are still reviewing the full ruling before deciding the next steps.
 

The National Review Committee’s report, published on January 25, indicated that Bangladesh has been paying an additional $400 million to $500 million annually due to flaws in the coal pricing formula. The committee also highlighted potential bribery involving Bangladeshi officials during the deal's signing, providing the legal basis for a fraud case against Adani Power.