Govt moves High Court challenging Arbitral Award to Vedanta
government on Thursday moved the Delhi High Court, challenging a foreign arbitration award won by Vedanta against the former's demand for a higher payout from its Rajasthan oil and gas fields.
The dispute between the Directorate of Hydrocarbons and Vedanta — Cairn arose due to incorrect cost recovery and non-allocation of common costs that allegedly had a huge «adverse financial implication on the Profit Oil/Gas» payable to the government.
As of May 14, 2020 (excluding interest), the government's share of profits dues of the company of $1.66 billion were short paid by $1.16 billion, representing 70% of the total amount due, according to the government.
While seeking to set aside the August 2023 arbitration award, which was modified by a three-member arbitral tribunal in December, the government claimed that the award conflicts with the public policy of India and the fundamental policy of Indian law.
The tribunal has rendered findings on substantive issues of interpretation and breach of the production sharing contract (PSC) while leaving the parties to settle and arrive at the computations underlying the award, senior counsel Sanjay Jain argued on behalf of the government.
Effectively, therefore, the award decides the rights and liabilities of the parties and has resulted in an unjust enrichment and entitlement to Vedanta and Cairn, at the cost of the public exchequer, the government stated. It added that consequences of the award will lead to the companies benefiting from the costs already wrongfully recovered
