FOUNDATION MAGAZINE FINANCIAL ADVICE STOCKLETTERS PORTFOLIO PMS BOOKS
BUY
Setback for Reliance Industries as Delhi HC Sets Aside Award in US$1.7bn KG Basin Gas Dispute
SN Thyagarajan (Bar  and  Bench) 14 February 2025
Economy & Nation
In a setback to Mukesh Ambani-owned Reliance Industries Ltd (RIL), the Delhi High Court on Friday quashed an arbitral award which had rejected the Central government's claims against (RIL) in the Krishna Godavari (KG) basin migrated gas dispute.
 
A division bench of Justices Rekha Palli and Saurabh Banerjee said, "In view of the above, we are setting aside the Impugned Order dated 9 May 2023 passed by the learned single judge, and the arbitral award passed by the learned arbitral tribunal dated 2018 being contrary to the settled position of law along the pending applications, if any, leaving the parties to bear their own costs."
 
A detailed copy of the order is awaited. 
 
In April 2000, a consortium led by RIL entered into a production sharing contract (PSC) with the Central government for the exploration and extraction of natural gas from the Krishna-Godavari (KG) Basin, off the coast of Andhra Pradesh. The PSC outlined the rights, obligations, and revenue-sharing terms between the parties.
 
A dispute arose in 2013 when government-owned Oil and Natural Gas Corporation (ONGC) addressed a letter to the Directorate General of Hydrocarbons (DGH) reporting evidence of lateral continuity of gas reservoirs between the Reliance-operated block and the adjacent blocks allocated to ONGC. The findings suggested that the gas pools in the Reliance and ONGC blocks appeared connected, indicating possible migration of natural gas from ONGC’s fields into Reliance’s production area.
 
Following these findings, the Ministry of Petroleum and Natural Gas (MoPNG) sought disgorgement from Reliance and its partners, demanding approximately $1.5 billion, along with an additional $174 million in interest. The demand was based on the assertion that Reliance had unfairly benefited from extracting gas that may have migrated from ONGC’s adjoining blocks.
 
In November 2016, the government’s claim was reinforced following an expert report submitted by Justice AP Shah, former Chief Justice of the Delhi HC. The report supported the view that gas migration had likely occurred, leading the Ministry to maintain and raise its total claim to over $1.5 billion, including interest.
 
In response, Reliance Industries invoked the arbitration clause under the terms of the PSC, seeking resolution through an international arbitration tribunal.
 
The arbitral tribunal issued its final award in July 2018, largely ruling in favour of Reliance Industries. The tribunal rejected most of the government’s claims, marking a significant legal victory for Reliance in the long-standing dispute.
 
In May 2023, a single judge of the Delhi High Court upheld an arbitral award rejecting the Central government’s claims against RIL in the dispute.
 
In a detailed order, Justice Anup Bhambhani held that the tribunal’s award is not in conflict with the ‘public policy of India’ and that the public trust doctrine was not contravened by Reliance. The bench said that the inferences drawn by the tribunal are factual conclusions which cannot be second-guessed by the Court in exercise of its powers under Section 34 of the Arbitration and Conciliation Act.The factual conclusions by the tribunal are perfectly rational, coherent and logical, the Court underscored.
 
This prompted the Union government to file a plea under Section 37 of the Arbitration Act. 
 
Comments
Economy & Nation
Why India's Start-up Boom Is Crumbling Under Poor Governance
Saurabh Chandra 14 February 2025
What went wrong with once marquee start-ups like Byju’s, Bharat Pe, Go Mechanics, Mojo Care and Zilingo, to name a few?
 
The financial results of Byju’s were not prepared on time. The board’s failure to perform their basic duty...
Economy & Nation
An ES(O)B Story: The Bizarre Process of Rejecting an Independent Director!
Ranganathan V, 14 February 2025
It has been emphasised at various times that the flaw in the present system of recruiting independent directors is not so much the quality and credentials of the persons chosen for this position, but that the candidate is often...
Economy & Nation
97% Voted against Re-appointment of Rashmi Saluja as Director of Religare
Moneylife Digital Team 13 February 2025
Dr Rashmi Saluja, executive chairperson of Religare Enterprises Ltd (REL) ceases to be a director of the company after her re-appointment proposal was rejected by shareholders.
 
In a regulatory filing, REL says, "One of the agenda...
Economy & Nation
Relief for Adani as Trump Suspends Enforcement of Foreign Corrupt Practices Law
Bar  and  Bench 12 February 2025
United States President Donald J Trump on February 10 signed an executive order today suspending the enforcement of the Foreign Corrupt Practices Act (FCPA) of 1977 in a move to enhance American business competitiveness and national...
Array
  • EDITORS'
    PICKS
  • MOST
    POPULAR
  • MOST
    READ
Free Helpline
Legal Credit
Feedback
Buy Now!

Absolute Power

Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam

View Options

The Scam: Now in it's 12th Printing

29 Years Of The Scam: The Perennial Bestseller, reads like a Thriller!
#Scam92: Read the actual story.

Buy Now Gift Know More

Moneylife Online Magazine

Fiercely independent and pro-consumer information on personal finance.

1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Gift Know More

Monthly Digital Access

Fiercely independent and pro-consumer information on personal finance.

30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Know More

Full Archive access

Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )

Buy Now

Stockletters in 5 Flavours

Outstanding research that beats mutual funds year after year

Buy Now Know More

MAS: Complete Online Financial Advisory

(Includes Moneylife Online Magazine)

Buy Now Know More
We are listening!
Reset
Success!

To continue

Please

or

With