Union Of India v Reliance Industries Ltd & Anor [2022] EWHC 1407 (Comm)

• Published date: 05 August 2022
• Law Firm: Gatehouse Chambers
• Author: Joshua Griffin and Amy Held

Background

This was a challenge under s 68 and s 69 of the Arbitration Act 1996 ('the 1996 Act') brought by the Indian Government against an arbitral award published in January 2021 and rendered in long-running arbitration proceedings.

The underlying arbitration arose out of two production sharing contracts concerning offshore oil fields in India, whereby the Respondent, the Union of India ('the Government'), granted the Claimant oil companies ('Reliance/BG') exclusive rights to exploit the fields for 25 years.

Both contracts were governed by Indian law, save that the arbitration agreement in each contract was governed by English law and provided that the seat of arbitration was London.

In December 2010, Reliance/BG commenced arbitration proceedings seeking inter alia to recover the costs of developing the fields from the Government. One aspect of their case was that the Government had agreed certain development costs could be recovered ('the Agreements Case'). A complex set of proceedings ensued, with eight Final Partial Awards rendered by the arbitral Tribunal between 2012 and the time of the present application; and various challenges before the courts resulting in two remissions to the Tribunal.

Procedural History

In 2018, Reliance/BG successfully challenged the Final Partial Award dated 12 October 2016 ('the 2016 Award') pursuant to s 68 of the 1996 Act on the grounds that the Tribunal had failed to address the Agreements Case. The matter was remitted to the Tribunal.

In October 2018, the Tribunal issued a Final Partial Award on the Agreements Case ('the 2018 Award'), finding in favour of Reliance/BG and allowing them to recover approximately USD 177m of its development costs. However, the Tribunal denied Reliance/BG some USD 259m of development costs (referred to as the 'EPOD Agreements Case') on the basis it lacked jurisdiction to consider the evidence put forward in respect of this sum. Although that evidence had been on the record prior to the 2016 Award, it had not been relied upon by Reliance/BG in its Agreements Case.

In 2020, Reliance/BG successfully challenged the 2018 Award pursuant to s 67 of the 1996 Act. Knowles J held that the Tribunal had erred in deciding that it did not have jurisdiction to consider evidence referred to above. He remitted the matter to the Tribunal, having varied the 2018 Award by a provision that the Tribunal did have jurisdiction to:

"take into account (a) documentary and other evidence which had not previously been referred to by [Reliance/BG] in the context of the EPOD Agreements Case before the [2016 Award], provided that it was evidence which was already on the record in the arbitration prior to the release of the [2016 Award], and (b) submissions in respect of such evidence".

Accordingly, the Tribunal issued directions for pleadings to be filed for a...