Reliance challenges Delhi HC ruling in Supreme Court over $2.81 billion gas migration dispute

Reliance Industries Ltd (RIL) on Tuesday approached the Supreme Court, challenging a recent ruling by the division bench of the Delhi High Court that overturned a 2018 international arbitration award in RIL's favour.

The Centre had accused the KG-D6 Consortium, which includes RIL, of causing gas migration from the adjacent blocks operated by ONGC. At that time, the petroleum ministry sought $1.55 billion in compensation. The dispute grew through several legal stages and eventually reached the Delhi High Court. In May 2023, a single-judge bench of the Delhi High Court dismissed the government's challenge to an arbitral award favouring RIL. However, on appeal, a division bench overturned the ruling on March 3, 2025.

After the division bench's ruling, in March, the Ministry of Petroleum and Natural Gas raised its demand to $2.81 billion, referencing new legal developments and a reassessment of the gas migration issue.

While RIL submitted its special leave petitions with the Supreme Court last week, its partners BP and Niko have also filed their own separate yet interconnected petitions, disputing the High Court's decision.

In its appeal to the Supreme Court, RIL has argued that the division bench lacked the authority to reassess the merits of the case, as the dispute had already been resolved through international arbitration. The company, led by Mukesh Ambani, maintains that the 2018 ruling by the arbitration tribunal—a three-member panel chaired by Singapore-based arbitrator Lawrence Boo—was final and binding under the terms of the production sharing contract (PSC).

In March, Reliance stated that both the company and its partners reject the allegations and intend to contest the updated ruling in court. RIL said that its legal advisors indicated that both the division bench's judgment and the revised demand are untenable and that it is taking steps to challenge the Delhi High Court’s division bench decision and does not anticipate any liability arising from the matter.

The origins of the dispute date back to 2013 when ONGC notified the Directorate General of Hydrocarbons (DGH) about the potential reservoir connectivity between its Godavari PML and KG-DWN-98/2 blocks, and RIL’s KG-D6 block. In response, the Delhi High Court ordered an independent technical review in 2014, appointing international oil and gas consultant DeGolyer and MacNaughton (D&M) for the task.

D&M’s 2015 report confirmed that natural gas worth ₹11,000 crore migrated from Krishna-Godavari fields of state-owned ONGC to the adjoining KG-D6 block. This prompted the government to formally demand $1.55 billion in 2016, along with an additional $175 million in profit petroleum, citing concerns of “unjust enrichment”.