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Informist, Wednesday, Jan. 21, 2026

 

NEW DELHI – The Supreme Court has upheld a 2018 arbitral award that asked UCM Coal Co. Ltd. to pay INR 1.27 billion to Adani Enterprises Ltd. along with interest. Rejecting an appeal by UCM Coal against the Allahabad High Court's September verdict, the top court said, "After hearing, we see no reason and ground to interfere with the order impugned. Accordingly, the special leave petition is dismissed. Pending applications, if any, shall stand disposed of".

 

The case relates to the Ministry of Coal allocating Chhendipada and Chhendipada-II Coal Blocks in Odisha jointly to Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd., Chhattisgarh Mineral Development Corp., and Maharashtra State Power Generation Corp. Ltd., who jointly ventured to explore and undertake mining operations from the allocated coal blocks. The three government corporations incorporated a special purpose company called UCM Coal for development, exploration, and mining of the coal blocks.

 

Thereafter, UCM Coal for the purposes of development and exploration of the coal blocks, floated tenders through an international competitive bidding process to select a mine developer and operator for the two Chhendipada coal blocks. Several bids were received and upon examination, the bid of Adani Enterprises was found favourable and accepted. Consequently, a letter of award was issued to Adani Enterprises in 2010 which was followed by a formal mining contract being signed in 2011. In the contract, UCM Coal was described as a 'mine owner' whereas Adani Enterprises was described as the 'mine operator'.

 

While the contract was still at the clearance stage, the coal block allocations came under the scrutiny of the Supreme Court in a public interest litigation initiated by Manohar Lal Sharma, wherein coal allocations relating to Chhendipada and Chhendipada-II were cancelled in 2014. A dispute between the parties arose and the same was referred to the arbitral tribunal.

 

Adani Enterprises had laid its claims before the tribunal for recovering expenses incurred by it in the process of acquisition of land in the coal block, expenses incurred towards setting up of mine infrastructure and for mobilising movable and immovable assets, and such amount which was paid or committed as advances including for capital commitments. Disputing Adani Enterprises' claims, UCM Coal said the former had engaged sub-contractors without prior written consent of the petitioner, which was prohibited in the mining contract. UCM Coal contended that inflated claims had been made by Adani Enterprises which could not be substantiated. In 2018, the arbitral tribunal allowed the claims of Adani Enterprises, against which UCM Coal moved the high court, which also ruled in favour of the respondent.

 

On Wednesday, shares of Adani Enterprises ended more than 1% lower at INR 2,032.20 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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