**Reliance Industries Challenges Delhi High Court Ruling on $1.7 Billion Gas Dispute**
A consortium led by Reliance Industries Ltd (RIL) has taken its case to the Supreme Court, contesting a Delhi High Court decision that annulled a $1.7 billion arbitral award in its favor regarding the ongoing Krishna-Godavari (KG) Basin gas migration dispute with Oil and Natural Gas Corporation (ONGC). The consortium, which includes British Petroleum Exploration (Alpha) Ltd, a subsidiary of BP Plc, and Niko (NECO), submitted petitions on May 14. Both BP and Niko have also filed independent appeals against the High Court’s ruling.
A source familiar with the situation confirmed to Mint that the plea against the High Court’s decision was filed last week, although it remains uncertain when the case will be scheduled for a hearing. An email inquiry sent to Reliance on Tuesday afternoon went unanswered.
**Background of the Dispute and High Court Ruling**
The Delhi High Court’s ruling, delivered on February 14 by Justices Rekha Palli and Saurabh Banerjee, overturned a May 2023 decision by a single judge that had upheld the arbitral award. The division bench deemed the award unenforceable, citing several legal issues. The court highlighted four main points: RIL’s failure to disclose a significant 2003 report, the arbitration not qualifying as international, a violation of the public trust doctrine concerning natural resources, and unjust enrichment, as the consortium benefited from gas owned by ONGC or the government.
This verdict was viewed as a significant victory for the central government in one of India’s most prominent energy sector disputes, paving the way for the government to recover over ₹12,800 crore (approximately $1.7 billion) from the consortium. In a stock exchange filing in March, RIL revealed that the Ministry of Petroleum and Natural Gas had issued a separate demand of $2.81 billion from RIL, BP, and Niko based on the findings related to gas migration.
**Origins of the Dispute**
The conflict traces back to April 2000 when RIL and its partners entered into a production-sharing contract (PSC) with the government for the KG-D6 block off the coast of Andhra Pradesh. RIL holds a 60% stake in the block, while BP owns 30% and Niko holds the remaining 10%. In 2013, ONGC raised concerns about potential connections between gas reservoirs in its blocks and those in the KG-D6 field. A joint study conducted by US-based consultant DeGolyer and MacNaughton confirmed in 2015 that substantial quantities of gas had migrated from ONGC’s blocks into RIL’s.
The report estimated the value of the migrated gas to exceed ₹11,000 crore. In response, a panel led by former Delhi High Court Chief Justice A.P. Shah recommended compensation for what it termed “unjust enrichment.” Consequently, the government sought $1.5 billion in compensation, along with $174 million in interest. The consortium contested this claim and initiated arbitration in 2016.
**Conclusion**
As the legal battle continues, the outcome of the Supreme Court’s review will be pivotal in determining the future of the gas migration dispute and the financial implications for the involved parties. The case underscores the complexities of energy resource management and the legal frameworks governing them in India.
**FAQ**
**What is the Krishna-Godavari Basin gas migration dispute?**
The Krishna-Godavari Basin gas migration dispute involves allegations that gas from ONGC’s blocks has migrated into the KG-D6 block operated by Reliance Industries, leading to legal battles over compensation and rights to the gas resources.
