Relief for Reliance Industries in Panna, Mukta and Tapti Gas Field Dispute
In a relief to Reliance Industries, the Supreme Court on Wednesday allowed arbitration in London between the firm and the Centre over royalties and taxes in Panna, Mukta and Tapti oil & gas fields. These oil & gas fields are located on western coast.
The Supreme Court also ruled that the arbitration will be held according to Indian law. Reliance had sought the arbitration to be conducted according to the United Nations Commission on International Trade Laws (UNCITRAL).
Mukesh Ambani's Reliance Industries had approached the Supreme Court for settlement of issues with the oil ministry over reimbursement of royalties and taxes in the Panna, Mukta and Tapti (PMT) fields through arbitration in London.
The oil ministry had opposed arbitration in London and wanted the issue be decided by Indian court.
The oil ministry on December 22, 1994, had entered into two production sharing contracts with Reliance and Enron Oil and Gas India (the predecessor to BG Exploration and Production India) and ONGC for the exploration and production of petroleum from the Tapti and Panna-Mukta fields.
The two contracts were to be operative for a period of 25 years and would expire only in 2019 unless it is terminated earlier or mutually extended by the parties.
Earlier in 2011, the BG Group and Reliance had approached the government to appoint an arbitrator for reimbursement for royalties and cess paid to the government on account of differences over methods to calculate cost recovery. Since the government refused, the firms approached the Court of Arbitration, Hague.
Shares of Reliance Industries were up 0.9 per cent to Rs 1,097.60 in noon trade, outperforming a flat Mumbai market.
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