SC refers Krishna-Godavari basin gas dispute to mediation

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi appointed Desai as sole mediator, with assistance from two domain experts to be suggested by the parties. "We are informed that they themselves have not been able to find a viable solution," the bench observed, noting that both sides had sought adjournments earlier to explore a settlement. Attorney General R Venkataramani, representing the Centre, and senior advocate Kapil Sibal, appearing for the Reliance-led consortium, supported mediation.

The Chief Justice observed that Desai had extensive experience in resolving commercial disputes. The latest development comes as Reliance, BP Exploration and Niko challenge a February 14, 2025, Delhi High Court verdict that overturned an international arbitration award in their favour. In July 2018, a three-member arbitration tribunal, by a 2-1 majority, rejected the government's $1.55-billion claim and awarded $8.3 million in compensation to the consortium.

A Delhi High Court single judge subsequently upheld the award before a division bench set it aside following the Centre's appeal. The dispute dates back to 2013, when ONGC alleged that Reliance had extracted gas migrating from its adjoining fields. An inquiry by a committee headed by retired Justice A P Shah subsequently concluded that the KG-D6 contractor had benefited from producing gas belonging to adjoining ONGC blocks.

Following the committee's findings, the petroleum ministry in November 2016 raised a demand that ultimately totalled $1.55 billion, including interest, against Reliance and its partners. Reliance disputed the demand, arguing that it was based on a misinterpretation of the production-sharing contract, and initiated arbitration in November 2016. Reliance operates KG-D6 with a 60% interest, while BP holds 30% and Niko the remaining 10%. The Supreme Court has now asked the parties to coordinate with Desai to initiate mediation proceedings.