The Center has sued the Supreme Court against the $99 million valuation of Vedanta’s Ravva oil field | Today’s news
The Union government has moved the Supreme Court challenging the Delhi High Court’s order allowing Vedanta Ltd and Ravva Oil (Singapore) Pvt Ltd to enforce foreign arbitration awards arising from the Ravva oil field dispute involving claims of $99 million.
According to the Supreme Court’s list of cases, the Centre’s plea will be heard by Justices JB Pardiwala and Manmohan on Monday.
The Center challenged the judgment of the Delhi High Court dated July 1, 2026, which dismissed its objections to the execution of the decision. The Supreme Court also directed that bank guarantees given by Vedanta and Ravva Oil be released within eight weeks.
The dispute dates back to 1994, when the government entered into a production sharing contract (PSC) with a consortium including the Oil and Natural Gas Corporation (ONGC), Videocon Petroleum, Ravva Oil and Cairn Energy to develop the Ravva oil field in the Krishna-Godavari basin. Cairn Energy’s interest in the project subsequently passed to Cairn India, which was later merged with Vedanta.
ONGC Carry problem
At the heart of the dispute was how payments made by the companies to ONGC’s historical costs should be accounted for in calculating the parties’ respective shares of oil production revenue. The problem became known as the ONGC Carry problem.
The PSC stipulated that the disputes were to be submitted to arbitration in Kuala Lumpur, Malaysia under Malaysian law and the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.
In a partial decision dated 12 October 2004, the tribunal ruled in favor of the companies on two of the six issues and on the remaining four in favor of the government. It left ONGC Carry’s quantification of the issue unresolved and retained jurisdiction to decide the matter if the parties could not reach an agreement.
The government challenged the partial award in the Malaysian courts. Although initially quashed by the Kuala Lumpur High Court in January 2009, the Malaysian Court of Appeal reinstated it in September of that year. The Federal Court of Malaysia upheld the award in October 2011.
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In July 2014, the government issued a show cause notice demanding $64 million from Vedanta and $35 million from Ravva Oil, and threatened to return sums of revenue owed to the companies from oil sales. The companies disputed the claim and approached the tribunal to determine the amount owed under the ONGC Carry issue.
The tribunal issued its final decision on 26 October 2016. The government challenged the decision in the Malaysian courts, but its challenge was rejected, with the Federal Court of Malaysia upholding the decision on 28 February 2019.
High Court order
Vedanta and Ravva Oil subsequently approached the Delhi High Court to enforce the 2004 partial award and the 2016 final award in India. The Center opposed the suit, arguing that the awards should not be enforced.
The Delhi High Court rejected the government’s objections, ruling that the enforcement court could not reopen the merits of the dispute or reconsider the tribunal’s findings simply because the government disagreed with them. He dismissed the centre’s objections and granted the companies’ suit, which ordered that their bank guarantees be released within eight weeks.
The Ravva dispute is not the only legal battle involving Vedanta’s oil and gas business. In a separate dispute over the CB-OS/2 offshore block in Gujarat’s Cambay basin, the company is challenging the Centre’s decision not to extend the contract for another 10 years and hand over operations to ONGC. The Delhi High Court reserved judgment on Vedanta’s appeal on 1 October 2026.
The mint’s queries to Vedanta and the Ministry of Petroleum and Natural Gas remained unanswered at the time of publication.
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