Heavens will fall: SC rebukes Centre for attempting to delay International Arbitration with RIL

The Supreme Court has come after the Central Government for attempting to scuttle the commencement of an international arbitration proceedings initiated against it by Reliance Industries, BP Exploration and Niko Resources over a cost recovery dispute of $400 million involving natural gas exploration in the KG-D6 block.

Senior Advocate Harish Salve, appearing for RIL apprised the bench of CJI DY Chandrachud and Justice PS Narasimha a petition by RIL and the two foreign companies questioning the last-minute delaying tactics by the government to stall the international arbitration scheduled for December and January in India.

He stated that the two arbitrators from the UK and Australia as well as experts from foreign companies are in India, but the government-nominated arbitrator ex-CJI VN Khare is proving elusive, putting in question the resolution of a 11-year-old dispute.

On the other hand, Senior Advocate AK Ganguli, appearing for the Government said that an appeal against the Delhi high court single-judge bench's decision to reject the government's bias allegation against two arbitrators is pending in the SC.

He added that if the arbitration is rescheduled to January or February "heavens will not fall" while warning of serious consequences on the public at large.

This didn't impress the bench which was of the opinion that such eleventh minute delay dents the promotion of Alternate Dispute Resolution mechanism as means to resolve issues quicker. It also asked the Government if this way investment in India could be encouraged.

"Heavens will fall if this is the way the government scuttles international arbitration. We are crying hoarse that we should encourage arbitration as an alternative mechanism to speed up resolution of commercial disputes to encourage foreign investment in India. Is this the way to encourage foreign investors to come to India for business purposes?", the bench said.