Sembcorp’s India arm has taken legal action against Siemens Gamesa Renewable Energy and its parent company, Siemens Energy AG, filing a lawsuit in a Bengaluru court. The lawsuit aims to prevent Siemens Gamesa from proceeding with the sale of its entire India business, which includes manufacturing, maintenance, and service operations in the renewable energy sector. This move by Siemens Energy AG is interpreted as a strategic exit from the Indian market through the divestment of its local assets
Legal Action and Court Proceedings:
In its filing before the Principal City Civil and Sessions Judge in Bengaluru, Sembcorp has requested an injunction to halt the sale of Siemens Gamesa’s India assets, including its shareholding interests. The court has issued notices to Siemens Gamesa, marking the commencement of legal proceedings.
Reasons for Legal Action:
The dispute between Sembcorp and Siemens Gamesa stems from an arbitration case initiated last year. Sembcorp’s Indian subsidiary, Green Infra Wind Energy Limited (GIWEL), had engaged Siemens Gamesa for a significant wind power project involving the supply, erection, and commissioning of wind turbine generators and related infrastructure totaling 300 megawatts. Allegedly, Siemens Gamesa defaulted on its contractual obligations, prompting GIWEL to terminate the contract and file a claim amounting to Rs 816 crore against Siemens Gamesa.
Counterclaims and Financial Impact:
In response, Siemens Gamesa has reportedly filed a counterclaim seeking Rs 1957 crore from GIWEL, escalating the legal dispute over financial liabilities related to the project.
Operational Implications:
The legal action by Sembcorp highlights concerns regarding the ongoing operations and financial stability of Siemens Gamesa in India. With substantial investments and operational presence in the renewable energy sector across several states in India, including Karnataka, Maharashtra, Madhya Pradesh, Gujarat, and Tamil Nadu, Sembcorp’s subsidiary GIWEL plays a significant role in the country’s wind power sector.
Strategic Significance:
The outcome of the legal proceedings will likely have strategic implications for both Sembcorp and Siemens Gamesa in the Indian renewable energy market. The injunction sought by Sembcorp aims to safeguard its interests and prevent any potential adverse impacts from Siemens Gamesa’s planned divestment of its India operations before resolving the ongoing arbitration dispute.
