Reliance Industries (RIL) and partner Shell’s liability to the government may fall in the Panna, Mukta and Tapti (PMT) case after an English court passed an order favouring the two companies on some aspects of the ongoing arbitration proceedings, sources familiar with the development said.
The order is one step — but not the final one — toward the conclusion of a decade-old dispute between the government and joint venture partners RIL and Shell (formerly BG Exploration) over the state’s share of income from the PMT fields.
“We cannot comment as the court processes in various jurisdictions are still ongoing,” a Shell spokesperson told ET. “The eventual impact of these processes will only be clear upon conclusion of the arbitration process. We are not in a position to state anything further at this stage.” RIL didn’t respond to ET’s emailed query.
The arbitration tribunal is slated to hear some key issues next month in London. The matter has gone from the tribunal to the court and back several times now. The latest court order pertains to the so-called ‘agreement case’, where the tribunal had fixed certain development costs in its revised award, which both the government and the two companies challenged in the court.
In October 2016, the arbitration tribunal pronounced a final partial award that went largely in favour of the government, following which the oil ministry computed the three oil companies’ liability and directed them in May 2017 to pay $3.9 billion. The companies refused to pay, saying the award had been challenged in an English court and the liability not yet quantified by the tribunal.
The government, which went to the Delhi High Court to enforce the award, has also urged the court to restrain the sale of assets by RIL until the money needed to pay up its liability in the PMT case is secured.