Hearing in RIL-Centre gas dispute continues in SC
The Supreme Court on Friday continued its high-stakes final hearing in the multi-billion-dollar Krishna-Godavari (KG) Basin gas dispute between the Central Government and a Reliance Industries Ltd (RIL)-led consortium of domestic and international energy firms.
The apex court is currently hearing the Rs 12,800 crore ($1.55 billion) appeal filed by RIL and its partners, challenging a February 2025 Delhi High Court Division Bench order.
The High Court’s ruling had set aside a 2018 international arbitral award and a subsequent single-judge decision that originally cleared the consortium of any wrongdoing.
The consortium on Friday took forward its arguments before a three-judge bench, led by Chief Justice Surya Kant along with Justices Joymalya Bagchi and Vipul M. Pancholi, insisting that they operated strictly within their licensed geographical limits under a valid Production Sharing Contract (PSC), meaning any incidental migration of gas cannot legally be classified as unjust enrichment.
Earlier in the week, the consortium informed the Supreme Court that it intended to approach the Union Government to resolve the long-standing matter out-of-court through conciliation or mediation.
However, the Bench refused to pause the active court proceedings while outside settlement talks took place.
The top court had made it clear that while doors for peace talks are open, the court will not stop its clock.
The legal battle stems from the Union Government taking a hard line in court, fiercely alleging that the RIL-led consortium “virtually committed a theft” of natural gas that naturally flowed underground from state-owned ONGC’s blocks into Reliance’s adjoining KG-D6 area between 2009 and 2013.
Senior Advocate Kapil Sibal, representing the consortium’s foreign partners — UK energy giant BP Exploration (Alpha) and Canada’s Niko Resources — on Friday submitted that the government’s aggressive stance threatens to harm global investor trust and halt India’s economic momentum.
Sibal reminded the bench that India deliberately allows 100% Foreign Direct Investment (FDI) in deep-sea oil and gas sectors because these projects require massive capital and carry immense risks.
He argued that if stable international arbitration rulings can be easily overturned by local courts using retroactive laws, foreign companies will think twice before investing in India, ultimately slowing down national economic growth.
He asked what would happen if the situation were reversed — if ONGC had started pumping gas first, causing Reliance’s gas to flow into the state-owned field. “Would the government act the same way and force ONGC to pay a private company?” he questioned, pointing out the unfair asymmetry in the government’s logic.
Fiercely countering the government’s “theft” narrative, Senior Advocate Abhishek Manu Singhvi, appearing for RIL, had relied on basic physics to explain that natural gas is a “fugitive mineral.” It does not sit still like solid coal; it moves naturally through underground rocks based on pressure differences, much like water absorbing into a sponge.
Singhvi had pointed out that ONGC was “sleeping over” its gas fields for 10 years without drilling or drawing gas. Because Reliance was actively working its own block, a natural pressure vacuum was created, drawing the neighbouring gas toward it.
A key technical argument raised by RIL is that the Delhi High Court (in its February 2025 ruling) wrongly treated the matter as a domestic dispute, ignoring the international nature of the consortium, which includes foreign partners BP and Niko.
