SC junks plea against Vedanta arbitration awards

The Supreme Court of India dismissed the Union government's appeal on Monday, permitting Vedanta Resources and Ravva Oil (Singapore) to enforce $99 million arbitral awards against Vedanta. The case stems from a dispute concerning the Ravva oilfield located in the Krishna Godavari Basin. Initially, the government had contested the Delhi High Court's ruling on July 1, which had rejected the Centre's objections to enforcing the arbitral awards and ordered the release of bank guarantees Vedanta had maintained in 2018.

A Bench comprising Justices J.B. Pardiwala and Manmohan expressed their disapproval of the government's resistance to enforcing awards that date back more than two decades. The Court warned that such behavior could compromise confidence in India's arbitration regime, questioning the Centre's arguments and expressing frustration over the delay in enforcing the awards.

The Court emphasized that the arbitral awards had undergone judicial scrutiny at Malaysia's curial courts, and the government could not demand the High Court to determine the merits of the dispute, given its disagreement with the majority of the arbitral tribunal's interpretation.

The controversy originated from a 1994 production sharing contract between the petroleum ministry and a consortium that included Videocon Petroleum, Oil and Natural Gas Corporation, and Command Petroleum (India) Pty., which later merged into Vedanta. The contract aimed to attract private equity investment for the development of the Ravva Oil Field.

Disagreements on the interpretation of the contract led to arbitration proceedings in Kuala Lumpur. In October 2004, the arbitral tribunal issued a partial award, leaving the issue of quantification unresolved.