RIL, BP and Niko move SC against Delhi HC order quashing ₹12,800 cr arbitration award

According to Bar and Bench, the petitions were filed on May 14. RIL moved the main plea, while BP and Niko submitted separate but connected petitions challenging the same ruling.

The case is related to a dispute over gas migration in the Krishna-Godavari (KG) Basin.

In 2013, the Oil and Natural Gas Corporation (ONGC) alleged that gas from its block had migrated into an adjoining block operated by RIL and was being extracted and monetised without authorisation.

A government-appointed study in 2015 confirmed the presence of connectivity between the two fields.

Following this, the government raised a demand of nearly $1.55 billion — around ₹12,800 crore — from RIL.

The company, however, denied any wrongdoing, arguing there was no contractual clause barring it from using the gas.

It initiated arbitration proceedings, which largely ended in its favour, although one member of the tribunal dissented.

A single judge initially upheld the award, but in February this year, a Division Bench of the Delhi High Court overturned that ruling.

In its judgment, the court found the award to be “patently illegal” and against public policy.

It also concluded that the arbitration proceedings were domestic in nature and not international, since RIL — the lead entity — is based in India.

“In our considered opinion, since the lead member, like RIL in the present case, in an arbitration proceeding is an Indian entity, the arbitration has to be treated as a domestic arbitration and not an International Commercial Arbitration,” the court stated.

The High Court cited four key grounds for cancelling the award. It held that RIL had failed to disclose a 2003 report detailing gas movement, calling it a breach of contractual obligation.

It reiterated that the matter did not qualify as an international commercial arbitration due to RIL’s nationality.

The judgment also underlined that the gas, being a natural resource, is held in trust by the state and cannot be commercially exploited without explicit approval.

Finally, the court found that RIL and its partners had been unjustly enriched by profiting from gas that belonged to ONGC or the Indian government.

With the Supreme Court now seized of the matter, the focus shifts to whether it will reinstate the arbitration award or uphold the High Court’s ruling.