K-G gas dispute: SC to hear pleas of Reliance Industries, others in Feb

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The Supreme Court on Tuesday decided to hear, on February 25 and 26, the appeals filed by Reliance Industries Limited (RIL) and its partners, UK-based BP Exploration (Alpha) Limited and Canada’s Niko (NECO) Limited, challenging a Delhi High Court ruling in the Krishna-Godavari (KG)-D6 gas migration dispute.

 

RIL challenged the Delhi High Court (HC) order, which upheld the Centre’s claim that the Mukesh Ambani-led company and its consortium partners had siphoned gas from deposits of the ONGC block in the Krishna-Godavari (KG) Basin, off the coast of Andhra Pradesh. RIL’s allocated gas block was next to the one being operated by ONGC. The division bench of the Delhi HC had earlier this year overturned a single-judge bench order of 2023 upholding the ruling of the arbitration tribunal in RIL’s favour in 2018.

 

Sources said RIL has, in its plea, contended that the division bench of the Delhi HC should not have gone into the merits of the case since the matter had been heard and decided by a three-member tribunal headed by Singapore-based arbitrator Lawrence Boo.

 

RIL has also pleaded that the order passed by the international tribunal was binding on the parties under the terms of the production-sharing contract (PSC). The arbitration tribunal had rejected the government’s contention and said that the PSC doesn’t prohibit the contractor from producing gas, irrespective of its source, as long as the producing wells were located inside the contract area.

 

In its ruling, the division bench of Justices Rekha Palli and Saurabh Banerjee had also said that the arbitration award of July 24, 2018, in favour of the RIL-led consortium, was “contrary to public policy”. The consortium includes UK-based BP Plc and Niko Resources of Canada. BP and Niko have filed separate but related pleas contesting the findings of the Delhi HC.