Singapore’s Sembcorp in legal wrangle over India wind project

Singapore conglomerate Sembcorp Industries is embroiled in arbitration proceedings with vendor Siemens Gamesa relating to an historic wind power project in India.

Sembcorp late on Monday confirmed its indirect Indian wholly owned subsidiary, Green Infra Wind Energy Limited (GIWEL) and Siemens Gamesa are in dispute over a project contract entered by GIWEL with the vendor to supply, erect and commission a 300-megawatt wind power project consisting of 143 wind turbine generators and associated transmission facilities.

Following various alleged defaults on the part of the vendor, GIWEL terminated the contract and filed a Statement of Claim against Siemens Gamesa for 8.16 billion Indian rupees (approximately US$99.5 million) during its financial year ended 31 March 2023.

The vendor subsequently filed its Statement of Defence and counterclaimed for 19.575 billion rupees (approximately US$239 million). On 15 May 2023, the arbitral tribunal agreed upon the issues relating to claims to be determined by way of the arbitration.

Upstream has approached Siemens Gamesa for possible comment on the arbitration and disputes.

Lacking merit

Sembcorp said that GIWEL and its legal advisors have assessed the underlying disputes in the arbitration and concluded, based on the currently available information, that the counterclaims by the vendor lacked merit and that GIWEL is in a strong position to defend the arbitration against the vendor.

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“Sembcorp has reviewed the relevant information pertaining to the arbitration and taken appropriate external legal advice on the same. Based on the external legal advice, Sembcorp’s management has assessed that the counterclaims by the vendor lacked merit and the probability of its success against GIWEL is remote.”

The Singaporean company added that the arbitration is not expected to have any material adverse impact on its financial results and no provisions have been in relation to the arbitration.

Sembcorp further said it would make further announcements as and when there are material developments.

GIWEL currently owns and operates 727.70 megawatts of wind-based power projects spread across seven locations in the Indian states of Karnataka, Maharashtra, Madhya Pradesh and Gujarat.

Apart from these wind projects, GIWEL — through its subsidiary Green Infra Renewable Energy Limited — operates a 249.9-MW wind power project in Tuticorin, Tamil Nadu.