This Article is From Nov 12, 2013

Gas dispute: Supreme Court declines stay on RIL's arbitration petition

New Delhi:

The Supreme Court today declined to stay the hearing relating to the appointment of a presiding arbitrator for adjudication of dispute between Mukesh Ambani- led Reliance Industries Ltd (RIL) and government over recovery of cost for developing the country's key natural gas field in the Krishna-Godavari (KG) basin.

When the matter came up for hearing before Justice S S Nijjar, advocates for CPI MP Gurudas Dasgupta and NGO Common Cause sought stay of the hearing saying that a bench headed by Chief Justice P Sathasivam was seized of the PILs challenging Centre's decision to raise the price of natural gas in which they have also questioned the agreement on arbitration.

Justice Nijjar said both pleas are different and RIL's arbitration petition is not connected with Dasgupta's PIL.

"We will have the proceeding here. It cannot be stayed. You have to get an order from court one (of CJI) for stay of arbitration," Justice Nijjar said while posting the arbitration petition filed by RIL on January 7 next year.

The judge also said, "The arbitration clause is only between the Union of India and RIL and there is no third party".

RIL had moved the apex court for appointment of an arbitrator from foreign country with which parties in disputes are not connected after the Centre had declined the proposal.

RIL has nominated former CJI S P Bharucha as its arbitrator while the Centre chose ex-CJI V N Khare as its nominee.

Senior advocate Harish Salve, appearing for the RIL, opposed the submissions of senior advocate Colin Gonsalves and lawyer Prashant Bhushan, who were arguing on behalf of the MP and the NGO.

Salve submitted that Dasgupta and the NGO has no locus standi to interfere in the arbitration petition as the matter relates to contractual issue in which there was an arbitration clause between the RIL and the Centre.

During the hearing, Gonsalves said arbitration proceeding has to be stayed on ground of malafide as allegation of malafide has been against the Petroleum and Natural Gas Minister M Veerappa Moily and notice has been issued to him on MP's PIL.

"Keep this (arbitration petition) in abeyance till the CJI decides on our application (for stay on arbitration)," he said.

Gonsalves' submission was supported by Bhushan, who also said the NGO, Common Cause has challenged the agreement between the Government and RIL on the arbitration clause.

"Government in collusion with RIL allowed all types of illegality," Bhushan alleged.

RIL had commenced arbitration against the government on November 23, 2011.

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