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Informist, Friday, Aug. 7, 2026

 

--SC OKs HC hearing govt plea to execute award for $2.31 bln claims vs RIL

 

NEW DELHI – The Supreme Court Friday refused to interfere with the hearings in the Delhi High Court on the government's plea seeking enforcement of a 2016 final partial award for its $2.31-billion claims against Reliance Industries Ltd., in a dispute over cost recovery provisions and reimbursement of royalties and taxes related to the Panna-Mukta oilfield and Tapti gas field. The Bench led by Chief Justice of India Surya Kant said the issue of maintainability raised by Reliance Industries Ltd. against the government's plea can be taken after the final decision is given by the high court.  

 

Two production-sharing contracts were signed between the government and a conglomeration of Reliance Industries, British Gas Exploration and Production India Ltd., and Oil & Natural Gas Corp. Ltd. Under the contracts, the conglomeration of contractors was permitted to extract oil and gas from the Panna-Mukta and Tapti fields at their own cost, recoverable from the government subject to an upper limit.

 

In December 2010, Reliance Industries and British Gas Exploration took the government to arbitration over the cost recovery provisions, profit due to the government, and statutory dues, including royalty payable. They sought to raise the limit of cost that could be recovered from the sale of oil and gas before profits were shared with the government. The government countered with its own claims of expenditure incurred, inflated sales, excess cost recovery, and short accounting.

 

The dispute was being decided through a series of partial awards. After all the final partial awards were passed, the actual amounts to be paid were to be computed in the final award. In the 2016 final partial award, no amount was awarded to the government. However, the government used the award to claim $2.31 billion from Reliance Industries and British Gas Exploration by filing a petition in the high court to execute the award.

 

Thereafter, on Jun. 2, 2023, Justice C. Hari Shankar held that the final partial award could only be implemented after a final decision on the application by Reliance Industries and British Gas Exploration to increase cost recovery and passage of the final quantum award. Justice Shankar of the single judge bench had rejected the government's execution petition as premature and not maintainable. He said the 2016 final partial award was not an executable arbitral award as it did not award any amount to the government. Challenging the single judge bench's order, the government moved the division bench of the high court.

 

Reliance Industries challenged the government's plea on maintainability in the division bench of the high court. The division bench rejected Reliance Industries' objections and listed the case for hearing on merits. Challenging the division bench's order, Reliance Industries moved the apex court.

 

At 1125 IST, the shares of Reliance Industries Ltd. were trading 0.5% higher at INR 1,330.90 apiece on the National Stock Exchange.  End

 

US$1 = INR 95.26

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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