PMT Gas fields case: SC junks Centre's plea against arbitrator

The Supreme Court today junked the government's plea seeking removal of a foreign arbitrator appointed by Reliance Industries Ltd (RIL) regarding its dispute with the government over the Panna, Mukta and Tapti oil and gas fields.
A bench, comprising justices A K Sikri and Rohinton F Nariman, dismissed the government's plea seeking removal of Peter Leaver QC, who was appointed the arbitrator after its May 28, 2014 order.
The apex court in its order had set aside a Delhi High Court verdict by which it had agreed to hear the government's plea against the arbitration proceedings in London.
Solicitor General Ranjit Kumar had said there was a need to change the arbitrator, alleging that he has been biased.

The apex court on May 28 last year had allowed the plea of RIL arbitration in London over its dispute with the government on the Panna, Mukta and Tapti oil and gas fields.
It had said the high court had committed "jurisdictional error" in agreeing to hear the government's plea.

The court had said that in the production-sharing contract, RIL and the Petroleum Ministry had "consciously agreed" for arbitration in London in case of any dispute.
Tapti, Panna and Mukta fields were awarded to a joint unincorporated venture of Reliance Industries and Enron Oil and Gas India Ltd in 1994 after biddings.

In 2002, BG Exploration and Production India Ltd acquired the share capital of Enron Oil and Gas India Ltd. The production-sharing contract was to be operative for a period of 25 years expiring in 2019.
In December 2010, differences arose on issues of payment and reimbursement of royalties, cess and service tax, and conduct of performance audit by the Comptroller and Auditor General, following which Reliance invoked foreign arbitration clause. At the start of the arbitration itself, the government had challenged the arbitrability of the disputes.
In December 2009, the arbitral tribunal rejected the government's objection to arbitrability of the disputes.

The government then moved Delhi High Court challenging the arbitral tribunal's December 2012 order, contending that arbitration should not proceed under foreign laws as the contracts were signed and executed in India.