Summary

Introduction

By way of the present petition under section 34 of the Arbitration & Conciliation Act, 1996 ("A&C Act" for short), the petitioner Union of India (through the Ministry of Petroleum and Natural Gas) impugns Arbitral Award dated 24.07.2018 ("impugned award", for short) rendered by a 2:1 majority of the arbitral tribunal, which decided the disputes that had arisen between the Ministry of Petroleum & Natural Gas of the Government of India ("Ministry", for short) and M/s Reliance Industries Limited ("Reliance" for short), M/s. Niko (NECO) Limited ("Niko" for short) and M/s. British Petroleum Exploration (Alpha) Limited ("British Petroleum" for short) from a Production Sharing Contract dated 12.04.2000 ("PSC" for short). The PSC related to exploration and extraction of natural gas from Block KG-DWN-98/3 in the Krishna-Godavari Basin off the coast of Andhra Pradesh in India ("Reliance Block" for short). For abundant clarity, under the PSC, Reliance was one of the constituents of the "Contractor", the other two being Niko and (subsequently) British Petroleum; and Reliance was the "Operator".

Reliance was the claimant in the arbitral proceedings; and the Ministry was the respondent. By way of the impugned award, two of the members of the arbitral tribunal have decided certain issues in favour of Reliance; whereas the third member has decided the matter in favour of the Ministry. In essence and substance the majority has held inter-alia that "Reliance is fully entitled to produce all hyrdrocarbons resulting from Petroleum Operations conducted within its Contract Area which may include hydrocarbons that could have migrated from an adjacent block."

The Ministry has now approached this court challenging the decision of the arbitral tribunal as held by the majority.