The Adani-BPDB Case: Judicial Review or Arbitral Autonomy?
The dispute between Adani Power (Jharkhand) Limited and the Bangladesh Power Development Board (BPDB) is no longer merely a disagreement over outstanding arrears. A public interest writ petition filed before the High Court Division of the Supreme Court of Bangladesh has transformed the controversy into a significant constitutional and arbitration law debate. While public discussion has largely centred on the commercial terms of the 2017 Power Purchase Agreement (PPA), the more enduring legal issue concerns the extent to which a domestic court may influence an international arbitration process chosen by contracting parties.
The controversy intensified after the High Court Division requested Adani Power to suspend its plan to commence arbitration before the Singapore International Arbitration Centre (SIAC), allowing state authorities time to complete their investigation into the legality of the agreement. This raises an important legal question. Should such an order be regarded as an attempt to influence an international commercial arbitration process, or is it a legitimate exercise of constitutional oversight in a matter involving public interest?
On 5 November 2017, the Bangladesh Power Development Board signed a 25-year Power Purchase Agreement with Adani Power (Jharkhand) Limited for the import of 1,496 megawatts of electricity from the Godda coal-fired thermal power plant in Jharkhand, India. The agreement contains a dispute resolution clause requiring contractual disputes to be resolved through arbitration under the rules of the Singapore International Arbitration Centre. By selecting SIAC, the parties deliberately chose a neutral international forum for resolving future disputes outside the jurisdiction of domestic courts.
Construction of the Godda Power Plant was completed in 2022, and commercial electricity supply to Bangladesh commenced in 2023. Soon afterwards, disagreements emerged concerning electricity tariffs, coal sourcing, tax exemptions, and late payment surcharges. Although BPDB initially made payments regularly, shortages of foreign exchange and rising energy costs caused arrears to accumulate throughout 2023 and 2024.
As the outstanding dues increased, Adani expressed concern over delayed payments and reportedly reduced electricity supply on 31 October 2024. The financial situation improved considerably during 2025. On 2 May 2025, Adani Power’s Chief Financial Officer, Dilip Jha, disclosed during the company’s post-earnings conference call that Bangladesh had paid approximately US$1.2 billion out of nearly US$2 billion billed under the agreement since supplies commenced. Around US$900 million remained outstanding. However, monthly payments had become regular and were exceeding the current monthly invoices, enabling Adani to restore full electricity supply. Despite this improvement, negotiations failed to resolve the remaining disagreements, prompting Adani to invoke the contractual dispute resolution mechanism.
Meanwhile, an unexpected constitutional challenge emerged before the High Court Division. In November 2024, Advocate Md. Abdul Qaiyum, who was neither a party to the Power Purchase Agreement nor to its arbitration agreement, filed a public interest writ petition questioning the legality of the 2017 agreement.
On 19 November 2024, a Bench comprising Justice Farah Mahbub and Justice Debasish Roy Chowdhury issued a Rule and several interim directions. Rather than declaring the agreement invalid or permanently restraining arbitration, the Court directed the Government to constitute a committee of internationally reputed legal and energy experts to review the agreement. It also ordered an inquiry into the circumstances surrounding its execution and directed BPDB to produce all relevant negotiation records before the Court. Additionally, the Court requested Adani to suspend its intended SIAC arbitration until the review committee completed its investigation.
Adani maintained that the parties had expressly agreed to resolve disputes through SIAC arbitration and that such proceedings were beyond the jurisdiction of Bangladeshi courts. The High Court’s interim order raises important questions under international commercial arbitration law.
The first concerns the principle of party autonomy, which is widely recognised as the foundation of international commercial arbitration. Party autonomy means that parties are free to determine the manner in which their disputes will be resolved. By selecting SIAC arbitration, Adani and BPDB deliberately chose a neutral and internationally recognised forum for resolving contractual disputes. Consequently, the role of domestic courts is generally limited to circumstances expressly recognised by arbitration legislation and international conventions.
Closely connected to party autonomy is the principle of minimal judicial intervention. Article 5 of the UNCITRAL Model Law on International Commercial Arbitration provides that courts shall not intervene in matters governed by the Model Law except where expressly authorised. Bangladesh’s Arbitration Act, 2001 adopts the same philosophy. Section 7 provides that where parties have entered into an arbitration agreement, courts shall not entertain legal proceedings except as permitted under the Act. Modern arbitration-friendly jurisdictions, including Singapore, England, and Hong Kong, consistently follow this restrained judicial approach.
The present case is unusual because the High Court’s intervention was not initiated by either contracting party. Instead, it arose from a constitutional writ petition filed by a third party who was not bound by the arbitration agreement. This gives rise to an important doctrinal question. Can a constitutional court, acting upon the petition of a non-signatory, issue an interim direction that effectively postpones the commencement of an international commercial arbitration chosen by the contracting parties? Reasonable arguments exist on both sides.
Supporters of the Court’s approach may argue that there is an important distinction between judicial assistance and judicial interference. BPDB is a statutory public authority, and the Power Purchase Agreement involves substantial public expenditure. Allegations concerning procedural irregularities, lack of transparency, and possible corruption had already become matters of significant public concern. Under Article 102 of the Constitution, the High Court possesses broad powers to ensure legality, accountability, and transparency in public administration. Viewed from this perspective, the Court was not deciding the contractual rights of the parties or questioning the validity of the arbitration agreement. Instead, it sought to preserve the status quo while constitutional questions concerning governmental decision-making were examined.
The opposing argument is equally persuasive. International commercial arbitration depends upon commercial certainty and respect for party autonomy. Investors choose arbitration because it limits exposure to domestic judicial proceedings. Even a temporary judicial postponement initiated by a non-signatory may create uncertainty regarding the enforceability of arbitration agreements and the predictability of the dispute resolution framework. If constitutional proceedings can delay an agreed arbitral process despite an exclusive arbitration clause, foreign investors may question Bangladesh’s commitment to an arbitration-friendly legal environment.
Another important principle is the doctrine of competence-competence. This doctrine empowers arbitral tribunals to determine their own jurisdiction, including questions concerning the validity of the underlying contract. The House of Lords, in Fiona Trust & Holding Corporation v. Yuri Privalov, affirmed that allegations of bribery or illegality in the formation of a contract do not automatically deprive an arbitral tribunal of jurisdiction. Unless the arbitration agreement itself is directly challenged, disputes concerning the legality or validity of the contract ordinarily remain within the competence of the arbitral tribunal.
The discussion also requires consideration of the doctrine of anti-suit injunctions. An anti-suit injunction is an order restraining a party from commencing or continuing proceedings before another court or tribunal. Strictly speaking, the High Court did not issue such an injunction. It neither prohibited SIAC arbitration permanently nor declared the arbitration clause ineffective. Rather, it requested Adani to defer commencement of arbitration until the government-appointed review committee completed its inquiry. Whether such a temporary postponement nevertheless amounts to indirect judicial interference remains an open legal question.
The central issue, therefore, is not whether the High Court possesses constitutional jurisdiction. It unquestionably does. The real question is whether that jurisdiction should be exercised in a manner that delays an international arbitral process agreed upon by commercial parties, particularly where the constitutional proceeding has been initiated by a person who is neither a party to the contract nor to the arbitration agreement. The answer requires careful consideration of party autonomy, competence-competence, and the proper limits of judicial intervention in arbitration.
The Adani dispute should not be viewed as demonstrating that the High Court acted unlawfully. Equally, it should not become a precedent encouraging judicial intervention in international arbitration. Bangladesh’s economic development increasingly depends upon foreign investment in energy, infrastructure, and public-private partnerships. These sectors routinely rely upon international arbitration as the preferred mechanism for resolving commercial disputes. Investors assess not only the substantive protections available under domestic law but also the extent to which domestic courts respect arbitration agreements and uphold commercial certainty.
Ultimately, the Adani-BPDB dispute represents more than a disagreement over electricity tariffs or outstanding payments. It provides an opportunity to clarify the relationship between constitutional judicial review and international commercial arbitration in Bangladesh. Achieving an appropriate balance between judicial accountability and arbitral autonomy would contribute to greater legal certainty while preserving the constitutional role of the courts. As Bangladesh continues to attract foreign investment, judicial guidance on the interaction between constitutional review and arbitration agreements will play an important role in shaping the country’s commercial legal framework.
The long-term significance of the Adani-BPDB case lies not in the outcome of the underlying commercial dispute, but in the guidance it may provide on reconciling constitutional oversight with the principles of international commercial arbitration. A carefully calibrated judicial approach will help reinforce both public accountability and confidence in Bangladesh’s evolving arbitration regime.
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