Reliance KG Basin Gas Dispute Sent to Mediation by Supreme Court

The Supreme Court on Friday, 30 October, sent the long-running dispute between Reliance Industries and the Government of India over gas migration in the Krishna-Godavari (KG) basin to mediation and appointed former Supreme Court judge Ranjana Prakash Desai as mediator. A bench headed by Chief Justice Surya Kant passed the order in appeals filed by Reliance, BP Exploration (Alpha) and Niko (NECO) after Reliance, through senior advocate Kapil Sibal, said it was open to mediation, according to Bar & Bench and LiveLaw.

Two Experts to Assist Justice Desai

The court asked each side to name a domain expert to help the mediator. The parties can make written and oral presentations to her. Bar & Bench reported that the parties were to contact Justice Desai on Friday or Saturday to fix a date, and that the court set no deadline for the mediation. The bench said of her: “She handles complex commercial disputes well.”

In May, when the final hearing began, the court had declined to pause the appeals after the companies first said they would write to the Centre seeking mediation.

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Gas Said to Have Moved From ONGC’s Block

The Centre’s case is that gas migrated from an adjoining ONGC block into Reliance’s KG-DWN-98/3 block, which is governed by a production sharing contract signed in April 2000. A government committee headed by former judge AP Shah studied the claim, and the government then issued a demand notice to Reliance. Bar & Bench and Deccan Herald put the demand at about $1.55 billion; LiveLaw reports it as roughly $1.74 billion plus interest.

Reliance took the demand to arbitration under the contract, and the tribunal’s majority award did not give the Centre the relief it sought. In February 2025, a Delhi High Court division bench set that award aside for patent illegality, and the three companies appealed to the Supreme Court.

Progress Report in Four Weeks

Bar & Bench reported that the case is listed after four weeks, when the parties must tell the court how the mediation is going. If it fails, the appeals against the Delhi High Court ruling go back to a final hearing. Neither the Centre nor the companies have publicly said what terms they would accept.

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Source: Based on reporting by Bar & Bench, LiveLaw and Deccan Herald.

Image: Bar & Bench.