Government To Enforce Delhi High Court Order In Gas Dispute With Reliance Industries, Says Oil Minister Puri
Citing cases in the past that the ministry has won, Puri said that this is an absolutely clear court verdict.
Petroleum and Natural Gas Minister Hardeep Singh Puri on Mar. 7 said that his ministry will pursue its demand for $2.81 billion from Reliance Industries Ltd. and its partners till the end, as the court decision on the gas migration row clearly establishes the government's rights. RIL had earlier received a Rs 24,522 crore ($2.81 billion) demand from the Ministry of Petroleum and Natural Gas.
Citing cases in the past that the ministry has won, Puri said that this is an absolutely clear court verdict. "We have already filed for $2.8 billion, and we will enforce it right till the end," he said.
The demand was after the Delhi High Court reversed the judgement that dismissed the appeal challenging an arbitral award to the company. This figure represents a significant increase from the previous $1.55 billion demand, showing additional calculations related to the gas migration issue. If the company is liable to pay this amount, it would represent approximately 31% of the company’s profitability over the past 12 months.
RIL, along with BP Exploration Ltd. and NIKO Ltd., had won an arbitral award in a dispute regarding alleged gas migration from ONGC’s blocks in the KG-D6 area. The government had accused the consortium of causing gas migration from the ONGC blocks, leading to a claim of $1.55 billion in 2014.
The government in 2016 had sent a notice to RIL and its partners British Petroleum and Niko. However, in 2018 an international arbitration ruled in favour of the company.
On May 9, 2023, a single judge of the Delhi High Court dismissed the government's appeal against the arbitral award, effectively upholding the original decision. However, the government escalated the matter by filing an appeal before the division bench of the Delhi High Court. The division bench reversed the single judge’s decision.
In response to the division bench ruling, Reliance Industries has said that it is taking steps to challenge the judgement and has sought legal advice to further contest the matter in higher courts.
In a separate matter, Reliance Industries’ wholly owned subsidiary, Reliance New Energy Ltd., was fined Rs 125 crore for failing to establish a battery cell plant under the government’s Production Linked Incentive scheme.
