Press "Enter" to skip to content

SC Says Foreign Arbitration Award in Favour of Vedanta Not Against Indian Public Policy

File photograph of Vedanta emblem (Image : Reuters)

The Ministry of Petroleum and Natural Gas had appealed in opposition to this overseas award permitting Vedanta and Videocon to get well $499 million, as a substitute of $198 million capped by the federal government for the event of the Ravva oil and fuel fields off Andhra Pradesh coast between 2000 and 2007.

  • IANS New Delhi
  • Last Updated: September 16, 2020, 5:35 PM IST

  • FOLLOW US ON:

In a significant setback to the Centre, the Supreme Court on Wednesday stated the requirement of procedural equity constitutes a elementary foundation for the integrity of the arbitral course of, because it upheld a overseas arbitration award in favour of Vedanta and Videocon. The Ministry of Petroleum and Natural Gas had appealed in opposition to this overseas award permitting Vedanta and Videocon to get well $499 million, as a substitute of $198 million capped by the federal government for the event of the Ravva oil and fuel fields off Andhra Pradesh coast between 2000 and 2007.

A bench comprising Justices S. Abdul Nazeer, Indu Malhotra and Aniruddha Bose stated the federal government has contended the award will not be enforced, since it’s opposite to the fundamental notions of justice, and the court docket is unable to just accept this submission. “The Appellants (government and ministry of petroleum and natural gas) have not made out a case of violation of procedural due process in the conduct of the arbitral proceedings”.






The bench famous that honest and equal remedy of the events is a non-derogable and obligatory provision, on which your complete edifice of the alternate dispute decision mechanism relies. The high court docket stated the Malaysian court docket had rightly examined the problem.

The authorities had argued that below the Indian regulation, a overseas arbitration award might be challenged if it was in opposition to public coverage. The bench noticed the federal government has not made out a case, how is the award in battle with the fundamental notions of justice, or in violation of the substantive public coverage of India.

“We feel that the interpretation taken by the tribunal is a plausible view, and the challenge on this ground cannot be sustained, to refuse enforcement of the Award,” stated the bench. The authorities had argued that the Production Sharing Contracts (PSCs) are “special contracts” pertaining to the exploration of pure sources, which considerations the general public coverage of India.

The bench stated “we are of the view that the disputes raised by the claimants (Vedanta and Videocon) emanate from the rights and obligations of the parties under the PSC. The award is not contrary to the fundamental policy of Indian law, or in conflict with the notions of justice.”

The apex court docket concluded that the enforcement of the overseas award doesn’t contravene the general public coverage of India, neither is it opposite to the fundamental notions of justice. The Delhi High Court had declined to intrude with the arbitral award in favour of Vedanta.

In June, the Centre challenged this choice within the Supreme Court. The apex court docket affirmed the judgment of the Delhi High Court dated February 19, 2020, and vacated the established order orders of June 17 and July 22.

“The award dated January 18, 2011 passed by the tribunal is held to be enforceable in accordance with the provisions of Sections 47 and 49 of the Arbitration & Conciliation Act, 1996,” stated the highest court docket.

Cairn India (now Vedanta) and Videocon had been allowed to get well $198 million as per the contract, and in July 2014, the Malaysian Court of Appeals upheld the arbitral award permitting extra recoveries to Vedanta.


Be First to Comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    %d bloggers like this: