Supreme Court Refers Reliance's ₹12,800 Crore KG Basin Gas Dispute With Centre To Mediation
The Supreme Court on Friday referred the ₹12,800 crore Krishna-Godavari (KG) Basin gas migration dispute between Reliance Industries Limited (RIL) and the Union government to mediation, appointing former Supreme Court Justice Ranjana Prakash Desai as mediator.
A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul Pancholi ordered mediation after observing that the parties had failed to reach a mutually acceptable solution.
Senior Advocate Kapil Sibal, representing Reliance, expressed the company's willingness to participate in mediation.
Oil India Discovers Natural Gas In Krishna-Godavari BasinThe court directed that Desai could receive assistance from two technical experts, one suggested by each party, given the dispute's commercial and technical complexities.
Both sides may submit written and oral presentations to the mediator.
The bench imposed no deadline for completing mediation and asked the parties to coordinate directly with Desai to schedule proceedings.
The matter will return to the Supreme Court after four weeks for a progress update.
The appeals were filed by Reliance and consortium partners British Petroleum Exploration (Alpha) Limited and Niko (NECO) Limited.
They challenged a Delhi High Court judgment overturning an arbitral award worth approximately ₹12,800 crore in their favour.
On Feb 14, a Delhi High Court division bench comprising Justices Rekha Palli and Saurabh Banerjee held that the award suffered from patent illegality and conflicted with public policy and the public trust doctrine.
It also classified the proceedings as domestic arbitration rather than international commercial arbitration.
The dispute originated from an April 2000 production sharing contract covering the KG-DWN-98/3 block.
In 2013, Oil and Natural Gas Corporation (ONGC) alleged that gas from its adjoining block had migrated into the Reliance-operated field.
A 2015 technical study established connectivity between the reservoirs, following which the Centre demanded approximately $1.55 billion from Reliance.
Reliance challenged the demand through arbitration.
While the tribunal's majority ruled in Reliance's favour, a dissenting arbitrator questioned its entitlement to profits from migrated gas without government approval.
A High Court single judge initially upheld the award before the division bench reversed that decision.
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