Reliance Industries is questioning the Indian government’s move to block its deal with Saudi Arabia’s Aramco wherein the Saudi Arabian company is investing $15 billion in its oil and petroleum business.
Mukesh Ambani, the Chairman of Reliance Industries had made this grand announcement in the company’s AGM a few months back that Saudi Aramco is buying 20% of RIL’s equity for a consideration of $15 billion. Now the government of India has filed a petition in the Delhi High Court seeking to restrain this investment deal till RIL clears pending dues of $3.5 billion. The dues are on account of the Panna-Mukta and Tapti oil and gas fields.
Reliance has filed a counter in the High Court which uses strong language to oppose the claim of the government saying it is an abuse of the process. The plea taken by RIL is that there has not been an award nor a fixation of liability.
The company has claimed that the government’s claim in its petition is a falsehood. The government has calculated the figure on its own volition, says RIL. The government had worked out the notional income from the oil fields and computed its own share. RIL says this is not sustainable.
The arbitration that is being referred to is an international arbitration held in London in the dispute between Government of India (GoI), BG Exploration & Production India Limited (BG) and Reliance Industries Limited (RIL) regarding the Panna-Mukta and Tapti Production Sharing Contracts (PSC). Though the arbitration identified some solutions to the dispute, no final award, particularly the monetary part had been decided or awarded. A partial award, given out in 2018 was also in favour of BG/RIL.
This is what has been pointed out by RIL in its counter to the government petition claiming that the 2018 partial award should have been taken into reckoning and if the government had done that, then the amount it has claimed will be less by a considerable margin.
The Indian government has already challenged this 2018 award in a court in the UK.
These international arbitration processes take years to get completed. It may be a while before the issue is decided one way or the other. It is now left to be seen as to what decision the Delhi High Court gives on the petition before it.