NEW DELHI
:
A division bench of the Delhi excessive courtroom on Monday agreed to listen to the Centre’s plea in search of to get better round $2.31 billion from Reliance Industries Ltd and its companions within the practically three-decade-old Panna-Mukta and Tapti offshore oilfields dispute.
The bench comprising Justice Navin Chawla and Justice Madhu Jain rejected RIL’s objection that the Centre’s enchantment was not maintainable. An in depth written order is awaited.
The matter is anticipated to be positioned earlier than the roster bench of the Chief Justice of the Delhi excessive courtroom earlier than 17 February to resolve the additional course of listening to.
The enchantment arises from a June 2023 single-judge ruling that rejected the Centre’s try and get better cash based mostly on a 2016 partial arbitration determination. The ruling held that arbitration proceedings between the events had been nonetheless ongoing and that no last quantity payable by both aspect had been fastened.
That is the second main arbitration-related dispute involving RIL and the Union authorities in latest occasions. A separate high-value case involving RIL—arises from the Krishna-Godavari basin gasoline migration dispute with state-run Oil and Pure Fuel Corp. Ltd—is at present pending earlier than the Supreme Court docket, after the Delhi excessive courtroom put aside a $1.7-billion arbitral award in RIL’s favour in February 2025.
The dispute
The dispute started with manufacturing sharing contracts signed in December 1994 between the Union authorities and a consortium led by RIL, together with British Fuel and ONGC. These contracts allowed the businesses to extract oil and gasoline from the Panna-Mukta and Tapti offshore fields.
Beneath the contracts, the businesses had been allowed to first get better the cash they spent on the mission. Nonetheless, there was a cap on how a lot improvement value they might get better, referred to as the price restoration restrict. After prices had been recovered, the remaining earnings had been to be shared with the federal government.
Later, disagreements arose over how prices and earnings had been calculated. The federal government alleged that RIL had crossed the price restoration restrict and brought more cash than allowed. The conglomerate argued that the federal government’s technique of calculation unfairly diminished its share of earnings.
In 2010, RIL and British Fuel took the dispute to worldwide arbitration, resulting in the establishing of a tribunal in London. Through the years, the tribunal issued a number of partial choices.
None of those choices fastened a last quantity payable by both aspect. As a substitute, they defined how prices and earnings ought to be calculated and clarified which prices fell throughout the restoration restrict.
Crucial determination got here in October 2016, when the tribunal clarified how improvement prices ought to be handled for revenue sharing, how tax ought to be calculated, and whether or not authorities approval was wanted for non permanent value and revenue changes. It didn’t order both aspect to pay a hard and fast sum.
Elements of this determination had been later challenged in UK courts. Whereas the courts largely upheld the tribunal’s findings, some points had been despatched again for reconsideration. This led to additional partial choices in 2018 and 2021, whereas some points, together with requests to lift the price restoration restrict, stay pending.
Although the arbitration was not over, the Union authorities approached the Delhi excessive courtroom in 2019 in search of to get better $2.31 billion, arguing that RIL had retained more cash than it was entitled to.
RIL opposed the transfer, saying the arbitration was nonetheless persevering with and that the federal government was attempting to get better an quantity it had calculated by itself, with none last determination by the tribunal.
In June 2022, the UK excessive courtroom rejected the Union authorities’s plea to implement the arbitral award towards RIL and its companions.
In June 2023, a single choose of the Delhi excessive courtroom additionally agreed with RIL and dismissed the federal government’s restoration plea, holding that partial arbitration choices explaining accounting guidelines couldn’t be enforced until a last, clearly quantified quantity was fastened.
Following that ruling, the federal government filed the current enchantment. With the division bench now clearing the maintainability subject, the case will transfer to a full listening to to resolve whether or not the Centre can pursue its $2.31-billion restoration declare now or should wait till the arbitration course of is totally accomplished.