Reliance Industries has mounted a strong counter to the government petition in the Delhi High Court seeking to block its USD 15 billion deal with Saudi Aramco, saying ?the petition is an abuse of process as no arbitration award has fixed any final liability of dues on the company.
In a counter affidavit, Reliance said it was a “falsehood” to say that the arbitration tribunal had passed an award requiring the company and its partners to pay USD 3.5 billion to the government.
It said the petition is an abuse of process as “it portrays that a sum of money is due and payable under the final award and purports to compute the money payable on a basis neither found in the arbitration award nor disclosed in the petition.”
The government, it said, has calculated on its own volition the revised figure of its share of profit from oil and gas production allegedly due by extrapolating the purported finds.
The affidavit came in response to the government moving the Delhi High Court seeking to block Reliance selling 20 per cent stake in its oil and chemical business to Saudi Aramco for USD 15 billion, in view of pending dues of USD 3.5 billion in Panna-Mukta and Tapti oil and gas fields.
An international arbitration tribunal issued a partial award in October 2016 in the dispute between the 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).
The tribunal in its 2016 award determined certain issues of principles. Pending determination of all issues before it, appropriately, it did not award any monetary sums. Quantification of amounts, if any, by the tribunal is to be done when all issues have been decided.
Certain parts of the 2016 award were challenged by BG/RIL before an English court wherein it decided some parts of challenge in favour of BG/RIL and directed the arbitration tribunal to reconsider those parts of the 2016 award. The tribunal, having reconsidered, issued another partial award in December 2018 which was in favour of BG/RIL.
While this challenge was pending in the English court, GoI unilaterally calculated certain amounts, based upon its interpretation of the 2016 award, which the government alleges are payable by Oil & Natural Gas Corporation (ONGC), BG and RIL.
Reliance said pursuant to the 2018 award, GoI’s claim comes down very significantly — a fact which the government has not taken cognisance of and approached the Delhi High Court prematurely for enforcement of its claim computed based on its interpretation of the 2016 award.
RIL maintained that except as quantified by the tribunal, no amount can be said to be payable at this stage.
GoI has challenged the 2018 award and the English court is yet to pronounce its judgment.
One of the most significant issues pending before the tribunal is an increase in the Cost Recovery Limit under the PSC. The arbitration tribunal is scheduled to hear BG/RIL’s application for increase of PSC Cost Recovery Limit next year.
If the tribunal decides in favour of BG/RIL, then GoI’s computation of sums allegedly payable by ONGC, BG and RIL is expected to further come down.
Final amounts payable, if any, by the parties (ONGC 40 per cent, BG 30 per cent and RIL 30 per cent) can only be determined by the arbitration tribunal in the quantification phase of the arbitration which will be scheduled after it has decided on all the issues before it, it said.
ONGC, who was directed by GoI in 2011 not to participate in the arbitration proceedings but be bound by the award, wrote to the stock exchanges in May 2018 that the government’s demand is premature.
The 2016 award, in part superseded by the 2018 award, cannot be said to have attained finality and attempts to enforce the 2016 award are premature, RIL said.
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.
Source: Financial Express