Supreme Court Sends Reliance–Centre KG Basin Gas Dispute to Mediation, Names Justice Ranjana Desai
After repeated adjournments for settlement talks failed, a bench led by CJI Surya Kant referred the $1.74 billion gas-migration row to former Supreme Court judge Ranjana Prakash Desai.
The Supreme Court on Friday, 30 October, referred the long-running dispute between Reliance Industries Limited (RIL) and the Union government over gas extraction in the Krishna-Godavari (KG) basin to mediation.
A bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana appointed former Supreme Court judge Justice Ranjana Prakash Desai as the mediator. The parties will each suggest domain experts to assist her.
Why mediation
Attorney General R. Venkataramani and Senior Advocate Kapil Sibal informed the bench that settlement talks had not produced a result. The Court noted that both sides had sought adjournments from time to time to explore a settlement but had been unable to find a workable solution.
The background
- ONGC alleged that gas reservoirs in its block were connected to the neighbouring block operated by RIL, so that gas had migrated from ONGC’s area into Reliance’s.
- A study by DeGolyer and MacNaughton pointed to such connectivity, after which the Centre set up a committee headed by former Supreme Court judge Justice A.P. Shah.
- Acting on the committee’s findings, the government raised a demand of about USD 1.74 billion, plus interest, on RIL for the alleged extraction of migrated gas.
- RIL took the demand to arbitration under its Production Sharing Contract. The tribunal’s majority found some breaches of contract but held they were not serious enough to justify the relief the government wanted.
- In February 2025, a Division Bench of the Delhi High Court set aside that award for patent illegality. It held that the government, as trustee of natural resources for the people, could not be assumed to have allowed the extraction simply because it had stayed silent.
The matter before the Supreme Court will now await the outcome of the mediation.
Featured image: Crew transfer between an offshore oil and gas platform and a supply vessel. Photo: GuavaTrain, Wikimedia Commons, CC0 (source).
Sources
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