The Supreme Court on Friday referred the long-running dispute between Reliance Industries Limited (RIL) and the Government of India over natural gas in the Krishna-Godavari (KG) basin to mediation, after both sides told the court that their own attempts to settle the matter had failed.
Source: LiveLaw
A bench headed by Chief Justice of India Surya Kant, sitting with Justice Joymalya Bagchi, requested former Supreme Court judge Justice Ranjana Prakash Desai to act as the mediator. The court also requested her to take the assistance of two domain experts, to be suggested by the parties.
"Both sides have requested adjournment from time to time to enable the parties to explore settlement. We are informed that they themselves have not been able to find out a viable solution," the court observed, according to LiveLaw. Attorney General R. Venkataramani and senior advocate Kapil Sibal informed the bench that the discussions had not reached a resolution. Reports said the Attorney General assured the court of the Centre's full cooperation, and the parties were asked to contact Justice Desai on Friday or by Saturday to fix a date and time for the mediation.
Source: South Politics
A dispute over gas alleged to have migrated between blocks
The dispute concerns the government's allegation that Reliance extracted natural gas that had migrated from an adjoining block operated by the Oil and Natural Gas Corporation (ONGC) into Reliance's own KG basin block. ONGC alleged that the gas reservoirs in the two blocks were interconnected. After a study by DeGolyer and MacNaughton indicated connectivity between the reservoirs, the government set up a committee headed by former Supreme Court judge Justice A.P. Shah, and later issued a demand notice to Reliance seeking approximately US$1.74 billion, along with interest, for the alleged extraction of migrated gas. Reliance challenged the demand through arbitration under the Production Sharing Contract. These remain allegations and claims in a pending dispute, not findings against the company.
An arbitral tribunal, in its majority award, held that although Reliance had breached certain contractual obligations, the breach did not amount to a material violation warranting the relief sought by the government. The government challenged the award, and in February 2025 a Division Bench of the Delhi High Court set the award aside, holding that it suffered from patent illegality. Reliance, BP Exploration (Alpha) Limited and Niko (NECO) Limited then appealed to the Supreme Court against the High Court's decision.
Friday's order does not decide the allegations. It opens a court-requested mediation, led by Justice Desai with expert assistance, through which Reliance, its partners and the Central Government will try to reach an amicable settlement of one of India's longest-running energy disputes.