The enforcement petition was filed by Vedanta and Ravva Oil under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996.
The dispute arose from a Production Sharing Contract (PSC) executed in 1994 between the Government of India, Videocon Petroleum, ONGC, Ravva Oil and Command Petroleum, later known as Cairn Energy India.
The contract was aimed at inviting private investment for development of the Ravva oil field in the Krishna Godavari Basin.
However, it was later restored by the Malaysian Court of Appeal and also upheld by the Malaysian Federal Court in 2011.
Vedanta and Ravva Oil then approached the arbitral tribunal for quantification, leading to a final award in 2016.
The enforcement petition was filed by Vedanta and Ravva Oil under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996. The Centre opposed enforcement under Section 48 of the Act.
The dispute arose from a Production Sharing Contract (PSC) executed in 1994 between the Government of India, Videocon Petroleum, ONGC, Ravva Oil and Command Petroleum, later known as Cairn Energy India. Cairn India and Vedanta amalgamated.
The contract was aimed at inviting private investment for development of the Ravva oil field in the Krishna Godavari Basin.
The arbitration concerned interpretation of the PSC, particularly the “ONGC Carry Issue”. The question was whether sums paid by the companies under Article 3.3 of the PSC to ONGC could be included for calculating the Post Tax Rate of Return (PTRR).
The arbitral tribunal passed a partial award in 2004. Two issues were decided in favour of the companies and four in favour of the government. The issue of quantification was left open.
The partial award was initially set aside by the Kuala Lumpur High Court in 2009. However, it was later restored by the Malaysian Court of Appeal and also upheld by the Malaysian Federal Court in 2011.
In 2014, the Centre issued a show-cause notice claiming USD 99 million. Vedanta and Ravva Oil then approached the arbitral tribunal for quantification, leading to a final award in 2016. The final award was also upheld by courts in Malaysia.
