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The federal government on Monday mentioned the bigger award of $3.85 billion plus curiosity by the arbitral tribunal concerning the manufacturing sharing contract for Panna-Mukta and Tapti fields was in its favour and that this was being pursued by the execution petition filed earlier than the Delhi Excessive Court docket. It additionally mentioned it retained the appropriate to hunt depart of the English Business Court docket’s June 9 order that went in favour of Reliance Industries and Shell in a price restoration dispute in reference to the offshore oil and gasoline fields.
The most recent order, which the federal government misplaced, got here on a plea by it difficult a $111-million arbitration award in favour of the 2 companies. “It’s pertinent to say that, even within the newest award and order, the contractor’s declare amounting to $148 million has been rejected,” the federal government mentioned in a press release.
Disputes arose between the events which had been referred to arbitration for decision in 2010. Up to now, the Arbitral Tribunal has handed eight substantial partial awards and 66 of the 69 points had been determined in favour of the federal government of India within the remaining partial award handed by the Tribunal in 2016, the federal government added.
Pursuant to the award, the Authorities of India issued a requirement letter to the contractors calling upon them to pay an quantity of $3.85 billion (excluding curiosity). The contractor didn’t make the fee as per the award. Subsequently, the federal government has filed an software for execution of ultimate partial award 2016 earlier than the Delhi Excessive Court docket.
Reliance and BGEPIL on December 16, 2010, dragged the federal government to arbitration over value restoration provisions, revenue as a result of state and quantity of statutory dues together with royalty payable. They wished to boost the restrict of the associated fee that may very well be recovered from the sale of oil and gasoline earlier than earnings are shared with the federal government.
The Authorities of India additionally raised counter claims over expenditure incurred, inflated gross sales, extra value restoration, and brief accounting. A 3-member arbitration panel, headed by Singapore-based lawyer Christopher Lau, by majority issued a remaining partial award on October 12, 2016. It upheld the federal government view that the revenue from the fields needs to be calculated after deducting the prevailing tax of 33% and never the 50% fee that existed earlier.
It additionally upheld that the associated fee restoration within the contract is mounted at $545 million in Tapti gasoline discipline and $577.5 million in Panna-Mukta oil and gasoline discipline. The 2 companies wished that value provision be raised by $365 million in Tapti and $62.5 million in Panna-Mukta. Royalty, it mentioned, needed to be calculated after the inclusion of promoting margin charged over and above the wellhead value of pure gasoline.
(With Inputs from PTI)
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