Govt loses challenge to $111 mn arbitration award in dispute with RIL and Shell
The government has lost its appeal in the English High Court against a $111 million arbitration award in favour of Reliance Industries Ltd and Shell
The government has lost its appeal in the English High Court against a $111 million arbitration award in favour of Reliance Industries Ltd and Shell in a cost recovery dispute in the western offshore Panna-Mukta and Tapti oil and gas fields.
High Court judge Ross Cranston on June 9, 2022 ruled that the government should have brought its objections over the arbitration tribunal not meeting the required thresholds, when issuing the 2021 award earlier, two sources with knowledge of the matter said.
Rejecting the government's arguments, the court said the objections are barred by an English law principle whereby a party cannot raise matters in new proceedings that could have been raised in earlier proceedings.
While an email sent to the Ministry of Petroleum and Natural Gas for comments remained unanswered, officials said the government will study the court order and look for appropriate forums for remedy.
A separate email sent to Reliance for comments too remained unanswered.
Reliance and Shell-owned BG Exploration & Production India on December 16, 2010, dragged the government to arbitration over cost recovery provisions, profit due to the State and amount of statutory dues including royalty payable.
They wanted to raise the limit of cost that could be recovered from sale of oil and gas before profits are shared with the government.
The government of India also raised counter claims over expenditure incurred, inflated sales, excess cost recovery, and short accounting.
A three-member arbitration panel headed by Singapore-based lawyer Christopher Lau by majority issued a final partial award (FPA) on October 12, 2016.
It upheld the government view that the profit from the fields should be calculated after deducting the prevailing tax of 33 per cent and not the 50 per cent rate that existed earlier.
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