The Supreme Court on Friday sought response from the oil ministry, Reliance Industries and BG on a plea by ONGC over reimbursement of royalties and taxes in the Panna, Mukta and Tapti (PMT) gas fields, jointly operated by the three firms.
The apex court in May last year while allowing a plea by RIL and its partner BG Exploration and Productionon had held that only British courts had the jurisdiction over the ongoing arbitration between the companies and the oil ministry over the former’s demand for reimbursement of royalties and taxes paid by them for the PMT gas fields.
Besides, the top court ruled that any final arbitral award can be challenged only in the British courts, but substantive Indian arbitration laws will have to be applied by the foreign courts.
Seeking clarification of the apex court’s judgment with regard to change of juridical seat of the arbitration, ONGC said the apex court had allowed the RIL’s plea “on the erroneous basis that there had been an amendment to the Production Sharing Contracts (PSCs) entered into between the parties, and that the juridical seat was shifted to London by consent of the parties.”
“This is factually incorrect, the correct facts are that the venue was shifted to Paris by consent of all parties, for which the PSCs were amended. That there has been no further amendment to the PSC shifting the venue back from Paris to London, as has been erroneously recorded in the said judgment,” the application stated. According to ONGC, it had not consented to the juridical seat of the arbitration being at London. “In fact, London could not have been the venue, let alone, juridical seat of the arbitration, as B.G. Exploration and Production India Ltd is controlled by British Gas which is based in England.”
Seeking impleadement in the appeal, ONGC further submitted that its 40% participating interest in the PSC would be seriously prejudiced if the jurisdiction of the Indian Courts are ousted to test the validity of the award passed by the arbitration tribunal. “This apex court by conferring jurisdiction on the English Courts, has ousted the jurisdiction of the Indian Courts to entertain any applications that may be available as per the governing law of the contract,” the application filed through counsel Sunil Jain stated.
The PSU said that its rights were “vitally and crucially affected by the May 28, 2014 judgment which has far reaching implications for enforcement purposes particularly as London is not a neutral venue as one of the three parties is based in London. It submitted that the English Courts would exercise jurisdiction over the current dispute by applying English law for deciding challenge to the arbitral award under this arbitration.
The apex court in May last year while allowing a plea by RIL and its partner BG Exploration and Productionon had held that only British courts had the jurisdiction over the ongoing arbitration between the companies and the oil ministry over the former’s demand for reimbursement of royalties and taxes paid by them for the PMT gas fields.
Besides, the top court ruled that any final arbitral award can be challenged only in the British courts, but substantive Indian arbitration laws will have to be applied by the foreign courts.
Seeking clarification of the apex court’s judgment with regard to change of juridical seat of the arbitration, ONGC said the apex court had allowed the RIL’s plea “on the erroneous basis that there had been an amendment to the Production Sharing Contracts (PSCs) entered into between the parties, and that the juridical seat was shifted to London by consent of the parties.”
“This is factually incorrect, the correct facts are that the venue was shifted to Paris by consent of all parties, for which the PSCs were amended. That there has been no further amendment to the PSC shifting the venue back from Paris to London, as has been erroneously recorded in the said judgment,” the application stated. According to ONGC, it had not consented to the juridical seat of the arbitration being at London. “In fact, London could not have been the venue, let alone, juridical seat of the arbitration, as B.G. Exploration and Production India Ltd is controlled by British Gas which is based in England.”
Seeking impleadement in the appeal, ONGC further submitted that its 40% participating interest in the PSC would be seriously prejudiced if the jurisdiction of the Indian Courts are ousted to test the validity of the award passed by the arbitration tribunal. “This apex court by conferring jurisdiction on the English Courts, has ousted the jurisdiction of the Indian Courts to entertain any applications that may be available as per the governing law of the contract,” the application filed through counsel Sunil Jain stated.
The PSU said that its rights were “vitally and crucially affected by the May 28, 2014 judgment which has far reaching implications for enforcement purposes particularly as London is not a neutral venue as one of the three parties is based in London. It submitted that the English Courts would exercise jurisdiction over the current dispute by applying English law for deciding challenge to the arbitral award under this arbitration.
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