Quick Summary: The Delhi High Court has dismissed an appeal by the Union of India to enforce a foreign arbitration decision against Reliance Industries Limited. The court ruled the enforcement as too early, citing unresolved issues regarding cost recovery limits.
The Union of India, through the Oil and Natural Gas Corporation (ONGC), entered into contracts with Reliance Industries Limited and another company for developing oil and gas fields. These contracts, dated December 22, 1994, included clauses for resolving disputes through arbitration under English law.
In 2004, BG Exploration and Production India Limited took over from Enron Oil and Gas India Limited, updating the contracts on January 10, 2005. Reliance and its partner held a 60% interest, while ONGC held 40%.
Disagreements arose over cost recovery and profit sharing. The arbitration panel issued several decisions, with the Final Partial Award (FPA) dated October 12, 2016, being central to the case. However, the panel's decisions were challenged in London, and some issues were sent back for reconsideration.
The Challenged Order: On July 2, 2023, the Delhi High Court dismissed the Union of India's request to enforce the 2016 decision, stating it was too early. The court held that the decision did not specify any amount owed to the Union of India, making it unenforceable as a money judgment.
"The judge held that the FPA 2016 does not award any amount to the appellant here."
The Union of India argued that the refusal to enforce the decision should be appealable under Section 50 of the Arbitration and Conciliation Act. However, the court focused on the decision's non-enforceability due to unresolved elements.
The Delhi High Court decided that the foreign arbitration decision could not be enforced yet because important details, like the cost recovery limit, were still unresolved. The case will be looked into further on February 17, 2026.
