Sembcorp Industries, a global energy and utilities company, has initiated arbitration proceedings against the Indian subsidiary of Siemens Gamesa, a leading wind turbine manufacturer. The dispute revolves around a composite supply contract and a land and site development contract, which were entered into by Sembcorp's subsidiary, Green Infra Wind Energy Limited (GIWEL), and Siemens Gamesa for the construction of a 300MW wind farm.
The project encompasses the installation of 143 wind turbine generators, along with the necessary transmission facilities. However, GIWEL terminated the project contract and subsequently filed a Statement of Claim against Siemens Gamesa, seeking Rs. 8,159.85 million ($134 million) in damages during the financial year ended on March 31, 2023.
In response, Siemens Gamesa filed its Statement of Defence and counterclaimed for Rs. 19,575.50 million ($321.7 million). The arbitral tribunal, established to resolve the matter, agreed on the issues pertaining to the claims during a session held on May 15, 2023, according to Sembcorp.
Sembcorp clarified that the arbitration proceedings are not expected to have a significant adverse impact on its financial results, and no provisions have been made concerning the arbitration. The company also stated that it has thoroughly reviewed the relevant information regarding the dispute and sought appropriate legal advice.
Siemens Gamesa commented on the ongoing arbitration proceedings: “Arbitration proceedings are currently sub-judice before the Arbitration Tribunal in India. Siemens Gamesa is already contesting the claims and is taking all steps in accordance with the law to protect its rights and interests. The project under discussion is already operational and generating wind power. Indeed, disputes between the parties would be decided by the Tribunal.”