Delhi HC overturns $1.7 billion arbitration award in Reliance gas dispute

The Delhi High Court has ruled in favour of the Indian govt, delivering a major blow to RIL and its foreign partners, UK-based BP Plc and Canada’s Niko Resources, in a long-running gas dispute.

By Connect Gujarat Desk 14 Feb 2025 in Business

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Delhi HC overturns $1.7 billion arbitration award in Reliance gas dispute

The Delhi High Court has ruled in favour of the Indian government, delivering a major blow to Reliance Industries Ltd (RIL) and its foreign partners, UK-based BP Plc and Canada’s Niko Resources, in a long-running gas dispute.

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The court overturned a 2018 international arbitration award that had favoured the RIL-led consortium, accusing the companies of “insidious fraud” and “unjust enrichment” amounting to over $1.729 billion, according to a report by The Economic Times.

The case revolves around allegations by state-owned ONGC, which claimed that RIL had illegally extracted natural gas from adjacent deposits in the Krishna-Godavari (KG) basin.

ONGC accused RIL of drilling wells near their block boundaries, allowing gas to migrate from ONGC’s fields to RIL’s KG-D6 block between 2009 and 2013.

RIL, which holds a 60 per cent stake in KG-D6, has consistently denied any wrongdoing, stating that it operated within the terms of its production sharing contract (PSC).

The Division Bench of Justices Rekha Palli and Saurabh Banerjee set aside a May 2022 ruling by a single judge that had dismissed the government’s accusations.

It also ruled that the international arbitration award of July 24, 2018, was ‘contrary to public policy’ in India.

The arbitration panel, led by Singapore-based Lawrence Boo, had previously ruled 2-1 in favour of RIL, stating that the PSC did not prohibit contractors from extracting and selling gas that had migrated from an external source.

#India #National news #Reliance #Business news #Business

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