Bombay HC refuses CBI probe into Reliance gas diversion case
What's the story
The Bombay High Court has dismissed a petition seeking a Central Bureau of Investigation (CBI) probe against Reliance Industries Ltd (RIL) and its chairman Mukesh Ambani. The petition alleged that RIL had diverted natural gas worth over $1.55 billion from Oil and Natural Gas Corporation (ONGC) wells in the Krishna Godavari Basin, off Andhra Pradesh's coast. The bench, led by Chief Justice Shree Chandrashekhar and Justice Suman Shyam, pronounced the order on March 27.
Petition details
Petition sought CBI probe against RIL, directors
The petition, filed by Jitendra P Maru, sought a directive from the court for the CBI to investigate RIL and its directors. The dispute dates back to July 2013 when ONGC suspected reservoir connectivity between its KG-D5 and G-4 blocks with Reliance's KG-D6. This was based on a detailed geological and geophysical interpretation of data from Godavari and KG-DWN-98/2 blocks showing 'evidence of lateral continuity of gas pools' into KG-D6.
Block details
KG-D6 awarded to Reliance-Niko consortium in 2000
The KG-DWN-98/3 block, known as KG-D6, was awarded to a consortium of Reliance Industries and Canada's Niko Resources in the first bid round under the New Exploration Licensing Policy (NELP) in 2000. In July 2018, an international arbitration tribunal rejected the Indian government's claim of $1.55 billion against Reliance Industries and its partners. The panel also awarded $8.3 million compensation to the three partners by a majority of 2-1 vote.
Legal battle
Government challenged arbitration award, RIL defended position
The government challenged the arbitration award before a single bench of the Delhi High Court, seeking it be set aside. RIL defended its position by saying that the gas was 'migratory,' meaning it naturally moved between blocks, giving them the right to extract it.
Court ruling
Delhi High Court upheld arbitration award in May last year
In May 2023, the Delhi High Court upheld the arbitration award, saying "the view taken by the arbitral tribunal is most certainly a 'possible view,' which calls for no interference." Justice Anup Bhambhani ruled that the tribunal's award is not in conflict with India's public policy and that Reliance did not violate the public trust doctrine. The bench held that the inferences drawn by the tribunal are factual conclusions which cannot be second-guessed by the court.