SC allows Reliance, Center to seek conciliation in 13-year series KG-D6 | Today’s news

Mumbai: The Supreme Court on Monday cleared the way for a possible settlement of the 13-year-old KG-D6 gas migration dispute by allowing A consortium led by Reliance Industries Ltd and the Union government will go ahead with the conciliation process, days after initially rejecting a similar request.

After five days of hearing, a three-judge bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi accepted Reliance’s plea for conciliation, counsel for the Reliance consortium said. Mint.

Attorney General R. Venkataramani, appearing for the Centre, said the government was willing to consider a fresh plea for conciliation, PTI reported.

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The nearly $3 billion dispute centers on allegations by the Center that a consortium of Reliance, Britain’s BP and Canada’s Niko (which pulled out in December 2019) extracted gas that migrated from blocks operated by the state-owned Oil and Natural Gas Corp. (ONGC) in the Krishna-Godavari Basin.

Reliance Consortium filed a similar petition for conciliation last week on May 20, but was rejected by the Attorney General and the Supreme Court. CJI Kant insisted on hearing arguments before passing a decision.

The Supreme Court adjourned the case to July 21.

Emailed queries to Reliance and the Ministry of Petroleum and Natural Gas were unanswered till press time.

Senior advocates Abhishek Manu Singhvi, Harish Salve and Kapil Sibal led the arguments for the RIL-led consortium, while the government’s arguments were presented by Venkataramani and senior advocate KK Venugopal.

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Singhvi told the court that this is not a domestic matter but an international commercial arbitration as BP Exploration and Niko Resources are internationally registered companies. He said gas is a “volatile mineral” and, unlike coal, it migrates from areas of high pressure to areas of low pressure.

Venkataramani, after hearing RIL’s arguments on the first day of the hearing, argued in court that the consortium had “committed theft” of ONGC’s gas and was responsible for it.

Shiv Sapra, a partner at Kochhar & Co., said the government’s willingness to consider reconciliation does not necessarily indicate any weakness.

“It reflects a recognition that high-stakes arbitrations involving sovereign resources carry inherent uncertainty, regardless of prior success before arbitral tribunals,” Sapra said. “At this level, the dispute ceases to be purely contractual and intersects with issues of public revenue, national assets and judicial oversight.”

Gautam Mohanty, an advocate at the Delhi High Court, said the case highlights a contradiction in India’s arbitration system. On the one hand, India wants to be investor-friendly and encourage companies to settle disputes through arbitration. On the other hand, the courts and the government can still scrutinize or challenge such awards, especially in cases involving national resources or the public interest.

The dispute concerns the KG-D6 block, which is the generic name for the KG-DWN-98/3 exploration block in the Krishna-Godavari (KG) basin off India’s east coast in Andhra Pradesh. It was awarded to a consortium led by Reliance Industries in 2000 through a production sharing agreement under India’s New Exploration licensing policy.

Reliance controls 66.67% of the project, while Britain’s BP owns 33.33% after consortium partner Niko exited its 10% stake.

The case dates back to 2013, when ONGC first suspected that the KG-D6 block might be connected to the neighboring KG-D5 and G-4 blocks. It accused Reliance-BP of extracting gas from its blocks.

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In 2014, the two sides appointed US consulting firms DeGolyer and MacNaughton to investigate the matter. The consultant concluded that there was indeed a significant migration of gas from ONGC blocks that was pumped by the Reliance-led consortium between 2009 and 2015.

The Ministry of Petroleum and Natural Gas raised the demand for $2.81 billion from Reliance, BP and Niko in March 2025 in connection with the gas migration issue.

The Reliance consortium moved the Supreme Court after a division bench of the Delhi High Court set aside the decision in favor of a three-judge tribunal headed by Singaporean arbitrator Lawrence Boo.