'Nobody will trust you...': SC junks Centre's plea against Vedanta arbitration awards

New Delhi: The Supreme Court on Monday dismissed the Union government's appeal and allowed Vedanta and Ravva Oil (Singapore) to enforce $99 million arbitral awards against the former arising from a dispute relating to the Ravva oilfield in Krishna Godavari Basin.

The government had challenged the Delhi High Court's July 1 judgement that rejected its objections to the enforcement of the arbitral awards and directed release of the bank guarantees maintained by Vedanta in 2018.

A Bench led by Justices J.B. Pardiwala and Justice Manmohan criticised the Centre for resisting enforcement of awards that date back more than two decades, warning that the litigation could undermine confidence in India's arbitration regime. "Nobody will trust you, if you behave like this. What are these arguments? You are frustrating an arbitral award like this? At the stage of enforcement of it? And we talk about all of this arbitration and seat and this and that?... ," it said.


The HC in its judgment had also stated that the arbitral awards have withstood the judicial scrutiny before the curial courts of Malaysia and the government cannot seek the high court to decide the merits of the dispute because it disagrees with the majority of the arbitral tribunal's interpretation.

The dispute arose from a 1994 production sharing contract between the petroleum ministry and a consortium comprising Videocon Petroleum, Oil and Natural Gas Corpand Command Petroleum (India) Pty, which later merged into Vedanta. The objective behind executing the contract was to invite private equities to invest in the development of Ravva Oil Field.

Disputes over the interpretation of the contract led to arbitration in Kuala Lumpur. In October 2004, the arbitral tribunal passed a partial award, leaving the issue of quantification unresolved.