RIL seeks immediate start of KG-D6 cost recovery arbitration

Reliance Industries (RIL), with its KG-D6 cost recovery arbitration stuck for three years, has sought immediate start of the proceedings for early resolution of the dispute.

RIL has sought immediate start of the proceedings for early resolution of the dispute.

Through its legal counsel, RIL has written to the Oil Ministry seeking start of the proceedings from January, Naming former UK judge Sir Bernard Rix as its arbitrator in place of former Chief Justice of India (CJI) SP Bharucha, sources privy to the development said.

Bharucha, who was nominated by RIL on November 23, 2011 on a three-member arbitration panel, quit earlier in December after the government challenged his nomination, over two-and-half years after it.

The government felt he had not disclosed all previous associations with RIL and that his arbitration could create doubts about his independence and impartiality.

The energy company, in the letter, expressed distress at the attempts of the government to remove Justice Bharucha from the panel of arbitration, sources said.

Bharucha, it said, has an impeccable reputation and it was unfortunate that the government chose to demonstrate, in the course of an international arbitration, that it did not have faith in a former chief justice. RIL said it had made full disclosure of all previous dealings with its arbitrator.

The correspondence relating to his disclosures ended in June, 2014.

In December, the government sought his removal from the panel of arbitrators, leading to his resignation.

RIL in the letter also said that the former chief justice of India VN Khare, who is the government's nominee on panel, did not respond to Bharucha's attempts to agree to appointing a Chairman of the panel resulting in considerable delay.

RIL said it was not challenging Khare's continuance at this stage in the the interest of the arbitration process. Rix and Khare will sit on a three-member arbitration panel headed by Supreme Court-appointed neutral arbitrator Michael Kirby, a former Judge of an Australian High Court. The arbitration is yet to start.

RIL had challenged the government notice to disallow cost through a Notice of Arbitration on November 23, 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.