Reliance Industries, partners get going in one case, stuck in the other

By: and |
New Delhi | Updated: January 21, 2015 11:57:46 AM

After getting going on one of their arbitration proceedings — over three years after it first began...

After getting going on one of their arbitration proceedings — over three years after it first began — Reliance Industries and its partners are finding the going tough in the other one, and have approached the Supreme Court for help in the matter.

Last week, the arbitration proceedings in the cost-recovery matter took a step forward when the government okayed RIL’s new arbitrator Sir Bernard Rix in place of Justice SP Bharucha, who recused himself. In between, there were years of wrangling between the two parties with the government first not agreeing to the arbitration and, later, using dilatory tactics to stall the arbitration.

Matters are not so straight-forward in the second arbitration over the government not implementing the Rangarajan panel report on gas pricing. In this case, while the government has been relatively quicker in appointing its arbitrator, it is insisting the presiding arbitrator be of Indian origin.

The case is in the Supreme Court where, interestingly enough in another RIL vs government arbitration, the court has already allowed a non-Indian national to be the presiding arbitrator. There is also a question mark over the government’s arbitrator Justice GS Singhvi continuing as he took charge as the chairman of the Competition Appellate Tribunal (Compat) in September 2014.

In their petition, RIL and its partners BP and Niko Resources contend that since the two arbitrators — Sir David Steel and Justice GS Singhvi — “have been unable to come to an agreement for appointment of third and presiding arbitrator for constitution of the arbitral tribunal, the Chief Justice or his designate should appoint an umpire arbitrator of a “different nationality other than the nationalities of the parties to the arbitration” as the two of them are foreign parties.

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Considering that two companies “are foreign companies, who are directly affected by any determination in the present case, it would be appropriate that the third arbitrator is appointed from a country other than India, UK, and Canada that is of neutral nationality,” the petition filed through Parekh & Co says. It added that “the principle of neutrality is a common feature of a number of institutional rules that govern the appointment of arbitrators.”

The contractors, who jointly manage KG-D6 block, further contended that earlier in the cost-recovery case the apex court had appointed an arbitrator of a neutral nationality under the PSC and had rejected the objections raised by the Centre to the appointment of a foreign arbitrator.

They also informed the apex court that it is still not known whether Justice Singhvi would continue as an arbitrator as he is the chairman of the Compat.

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