Quashing the government’s arguments, the High Court said a principle of English law prohibits a party from raising objections in new proceedings which might have been raised in earlier proceedings.
The report says the government will review the court order and seek appropriate forums for resolution.
The case dates back to 2010 when Reliance Industries and Shell’s BG Exploration & Production India Ltd (BGEPIL) filed arbitration proceedings against the government over a dispute over cost recovery – cost due to the state and statutory dues amounts , including royalties to be paid. The companies wanted to raise limits on costs that could have been recouped through the sale of oil and gas before the profits were shared with the government, the report adds.
The Indian government has also raised counterclaims relating to incurred expenses, inflated sales, recovery of excess costs and overdraft accounting.
A Singapore Arbitration Panel Issued a Partial Final Award (FPA) Upholding the Government’s View on Profit Calculation; cost recovery. The government used the award to seek $3.85 billion in RIL and BGEPIL dues. The two companies then challenged the FPA in the English High Court which referred one of the disputed issues to the Singapore Arbitration Tribunal. The court then ruled in favor of both companies on January 29, 2021.
“The Arbitral Tribunal found in favor of the Claimants (Reliance and BGEPIL) largely in its partial final award dated October 1, 2018. The Government of India and the Claimants appealed to the English Commercial Court against this 2018 FPA” , Reliance had said. last year in its annual report.
“The English Commercial Court dismissed the GoI’s challenges to the 2018 partial final award and upheld the claimants’ challenge that the arbitral tribunal had jurisdiction over the limited matter and referred the matter back to the arbitral tribunal” , he added.