HC overturns RIL arbitration award in $1.7 bn gas dispute

Verdict marks a significant victory for the Union government in the long-running legal battle

- Krishna Yadav

In a setback for the Mukesh Ambani-led Reliance Industries Ltd (RIL), the Delhi High Court's (HC) division bench on Friday overturned an international arbitration tribunal's ruling that had previously favoured the company in its $1.7 billion dispute with Oil and Natural Gas Corp. Ltd (ONGC) over alleged gas migration from adjoining fields.

The bench, comprising justices Rekha Palli and Saurabh Banerjee, also set aside a May 2023 single bench ruling that had upheld the 2018 arbitration award rejecting the government's claim.

The court, in its ruling, stated: "In view of the above, we are setting aside the impugned order dated 9 May 2023, passed by the learned single judge, and the arbitral award issued by the arbitral tribunal in 2018, as it is contrary to the settled position of law. All pending applications, if any, stand disposed of, with each party bearing its own costs."

The latest verdict marks a significant victory for the Union government in its long-running legal battle with RIL over gas migration in the Krishna Godavari (KG) basin—an issue that has been at the centre of India's energy exploration and production landscape for over a decade.

The ruling clears the path for the government to enforce its claim of around $1.7 billion against RIL and its foreign partners, while the company now has the option to challenge the decision before the Supreme Court.