RIL-Govt arbitration case: Third jugde still to accept appointment

Supreme Court appointed former Australian judge Micheal Kerby has so far not accepted becoming the presiding arbitrator in the KG-D6 cost recovery dispute as Oil Ministry hasn’t given its no-objection.

Kerby is willing to take up the assignment but before that he made a disclosure of his late father being at one point of time associated with UK’s BP, which partners Reliance Industries in KG-D6 block.

He wanted a no-objection from the ministry before taking up the job, sources privy to the development said.

But the Ministry has so far not given the no-objection, they said.

The apex court had on 29 September named Kerby as the presiding judge of a three-member arbitration panel to decide if government was right in disallowing $2.3 billion of KG-D6 cost for output lagging early projections.

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RIL and BP have given no-objection to Kerby being appointed the presiding arbitrator.

Earlier in April, Supreme Court had appointed former Australian judge Michael Hudson McHugh as the presiding arbitrator but he withdrew after government counsel objected to his remaining on the panel after initially refusing to accept the appointment.

Kerby was then named chairman of arbitral tribunal.

RIL recently named former UK judge Bernard Rix as its arbitrator in place of former Chief Justice of India SP Bharucha who quit earlier this month.

The government has named former Chief Justice of India VN Khare as its arbitrator on the panel.

Sources said Bharucha recused himself from the arbitration after the government challenged his nomination saying that he had not disclosed all previous associations with RIL and that his arbitration could create doubts about his independence and impartiality.

The arbitration which dates back to November 2011 is yet to start as procedural issues were raised from time to time.

RIL had challenged the government notice to disallow cost through a Notice of Arbitration on 23 November, 2011 saying the signed contract does not provide for output targets and there was no provision for disallowing any part of cost because of production not being in line with output guidance.

The government initially did not join the arbitration within the stipulated 30 days as provided under the Production Sharing Contract (PSC) but relented after RIL moved Supreme Court for appointment of the second arbitrator.

However, Justice (rtd) Bharucha and Justice (rtd) Khare failed to agree on the name of the third presiding arbitrator for 13 months and RIL had again moved the Supreme Court on 8 August, 2013.

Sources said the government raised objection to Justice Bharucha after two and half years after his appointment.

RIL says it had made full disclosure of all previous dealings with its arbitrator.

The company had filed a separate arbitration notice on 9 May over delays in approving revision in KG-D6 gas price.

For this arbitration, RIL named David Steel and the government named Justice GS Singhvi as their arbitrators.

The two have failed to agree on a third arbitrator and RIL has filed a petition in the Supreme Court seeking this appointment.

PTI