SC rejects Govt's plea on Andhra Off Shore
The Supreme Court today said that the Delhi High Court can't hear the government plea to conduct arbitration in Malaysia on a dispute over revenue share in Andhra Pradesh offshore oil fields with a consortium of Videocon Industries, Cairn and Ravva Oil.
The Supreme Court today said that the Delhi High Court can't hear the government plea to conduct arbitration in Malaysia on a dispute over revenue share in Andhra Pradesh offshore oil fields with a consortium of Videocon Industries, Cairn and Ravva Oil.
The Supreme Court set aside the orders of the High Court which said that it has jurisdiction to hear the petition of the Ministry of Petroleum and Natural Gas to conduct the arbitration in Kuala Lumpur and not in London, as asked by the consortium.A bench of justices R V Raveendran and G S Singhvi held that as per the agreement between the government and the consortium, the arbitration should be governed by the English law only. "We hold that the Delhi High Court did not have jurisdiction to entertain the petition filed by the government ...," the bench said. The apex court further held that the High Court had no power to entertain the plea filed by the government seeking arbitration in Malaysia and governed by the Indian laws."The parties had agreed that the arbitration agreement contained in Article 34 shall be governed by laws of England," said the bench.The government had awarded Andhra Pradesh offshore oil field to a consortium of Videocon, Cairns, Ravva Oil and ONGC in 1994.However, later some dispute arose over the revenue sharing, profit correctness of certain cost recoveries and the matter was referred to arbitration in Malaysia. In March 2005, a tribunal passed an interim award in favour of the consortium and the government challenged it before the High Court of Malaysia two months after that.This was opposed by the Videocon and other contending that the award could not be challenged in the High Court of Malaysia as the agreement was governed by the English laws. The government had also requested the Malaysian High court to conduct the remaining arbitral proceedings at Kuala Lumpur, but the request was rejected in April 2006.After that the government approached the Delhi High Court for stay of the arbitral proceedings.
This was again opposed by the consortium. However, the high court overruled their objections and held that it has jurisdiction to entertain the petition. It was challenged by Videocon before the apex court.
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