Summary

1. The Union of India (through the Ministry of Petroleum & Natural Gas of the Government of India)1, by virtue of the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 2 read with Section 13(1) of the Commercial Courts Act, 2015, seeks to assail the order dated 09.05.2023 3 passed by the learned Single Judge in O.M.P. (COMM) 487/2018, whereby the application under Section 34 of the Act preferred by it, against the Arbitral Award dated 24.07.2018 4 rendered by a 2:1 majority of the Arbitral Tribunal 5 was rejected by the learned Single Judge.

Factual Narrative:

2. The UOI on 12.04.2000, entered into a Production Sharing Contract 6 with both M/s. Reliance Industries Limited 7, who is the respondent no. 1 before us and one Niko Limited 8, who is the respondent no. 3 before us, in respect of Block Kg-DWN-98/3 situated in the Krishna-Godavari Basin off the coast of Andhra Pradesh 9, with a Participating Interest of 90% and 10% respectively. Soon thereafter, by way of a supplementary contract dated 1 hereinafter referred to as 'UOI' [Respondent before the learned Arbitral Tribunal; petitioner before the learned Single Judge] 2 hereinafter referred to as 'Act' 3 hereinafter referred to as 'impugned order' 4 hereinafter referred to as 'Arbitral Award' 5 hereinafter referred to as 'AT' 6 hereinafter referred to as 'PSC' 7 hereinafter referred to as 'RIL' [Claimant before the learned Arbitral Tribunal; respondent before the learned Single Judge] 8 hereinafter referred to as 'Niko' 9 hereinafter collectively referred to as 'Reliance Block' FAO(OS) (COMM) 201/2023, RIL transferred a portion of its 'Participating Interest' under the PSC in favor of one British Petroleum Exploration Limited 10, the respondent no. 2 before us.

3. In the said PSC, RIL and Niko as the 'contractor' had the right to take Cost Petroleum in accordance with the provisions of Article 15 of the said PSC; the right to take its Participating Interest share of Profit Petroleum in accordance with the provisions of Article 16 of the same PSC; the right to receive its Participating Interest share of any incidental income and receipts arising from Petroleum Operations and the obligation to contribute its Participating Interest share of cost and expenses including Contract Cost.

4. The UOI, also entered into another PSC with one Cairn Energy India Limited 11 in respected of the Block KG-DWN-98/2 and also with Oil and Natural Gas Corporation Limited 12 qua Block KG-OS-IG. Later on, ONGC acquired rights from CEIL qua Block KG-DWN-98/2. Interestingly, both the Block KG-OS-IG and Block KG-DWN-98/2 13 turned out to be adjoining blocks to the Reliance Block.

5. On 25.09.2000, RIL was granted a Petroleum Exploration License 14 qua the Reliance Block w.e.f., 07.06.2000 for a period of seven years, whereafter, from September 2001 till March 2002, RIL carried out 3D seismic survey in the Reliance Block and notified it to the UOI. hereinafter referred to as 'BPEL' 11 hereinafter referred to as 'CEIL' 12 hereinafter referred to as 'ONGC' 13 hereinafter collectively referred to as 'ONGC Block' 14 hereinafter collectively referred to as 'PEL'

6. On 26.11.2002, preliminary results qua Original Gas in Place 15 was prepared by one M/s. DeGolyer and MacNaughton 16 and forwarded by RIL to the UOI. The above was then followed by a Final Report by the very same D&M to the Director General of Hydrocarbons 17 on 31.01.2003.

7. Thereafter, though, the very same D&M also submitted an Appraisal Report on 06.11.2003 for Niko18 however, the same was neither forwarded to the UOI nor the DGH.

8. Thereafter, on 26.05.2004 RIL submitted an Initial Development Plan 19 qua 3 wells, i.e., Well 1 (D1), Well 2 (D2) and Well 3 (D3) situated in the Reliance Block, to the UOI. The said IDP was approved by the UOI in November 2004. Subsequently, RIL submitted an addendum to the above IDP 20 on 20.10.2006 to the Management Committee appointed in terms of Article 6 of the PSC, who eventually approved it in December 2006 itself.

9. It was only then on 01.04.2009 that RIL commenced commercial production of gas in the Reliance Block in accordance with the two aforesaid approvals granted to it in IDP and AIDP.

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