KG-D6 Case: No restraint on RIL continuing arbitral proceedings against government

Arbitration proceedings initiated by Reliance Industries (RIL) and others against the government over a cost recovery dispute of $400 million involving natural gas exploration in KG-D6 oilfields will resume soon as the Supreme Court has clarified that there is "no restraint" on continuing the proceedings.

"The special leave petition by the respondent (government) against the order of the (Delhi) High Court of December 9 is yet to be listed before this court. In the absence of any injunction by this court, the position clearly is that there is no restraint on the arbitral proceedings," a bench led by Chief Justice of India DY Chandrachud said while allowing the Mukesh Ambani firm's plea for continuation of the proceedings.

However, the present order does not constitute any expression of opinion on the merits of the government's appeal, the top court said. The order came after both RIL and the government moved the SC seeking contrary reliefs.

The government's appeal seeking termination of the mandate of the tribunal for "having lost faith" in its two foreign arbitrators - Michael D Kirby and Bernard Rix - is yet to be heard by the SC, while the plea by RIL, BP Exploration and Niko Resources was disposed of after senior counsel Harish Salve apprised the bench on how the government was trying to scuttle the international arbitration.

Stating that "there is no interdict on the tribunal proceeding ahead with the arbitral proceedings", Salve argued that the two arbitrators from the UK and Australia were in India, but the government's nominated arbitrator, former CJI VN Khare, was not agreeable to resume proceedings in view of the petroleum ministry's appeal pending in the SC.

Meanwhile, Reliance Industries on Friday withdrew its application seeking continuation of the tribunal's proceedings.