The Petroleum and Natural Gas Ministry has asked public sector oil refiners to claim $315 million (around ₹1,900 crore today) of the disputed profit petroleum amount from the joint venture partners of the Ravva fields — Cairn India, Oil and Natural Gas Corporation, Videocon and Ravva Oil (Singapore).
A senior Oil Ministry official confirmed the development, but refused to divulge further details.
A dispute has been going on in the Ravva field over the profit-sharing ratio between the Government and the contractors based on the post-tax rate of return (PTRR) earned by the joint venture.
The Government claims that the companies wrongly depressed the PTRR and paid less profit petroleum to the tune of $284 million.
Arbitration had been invoked by the joint venture companies in two separate proceedings, one by Cairn India and the other by Videocon.
The arbitration was held in the High Court of Kuala Lampur, Malaysia. However, the Government lost both cases.
After winning the cases, the joint venture had started deducting the profit petroleum amount due to the Government, and the total disputed amount added up to $314 million, including $15 million of short payment by Videocon. The Ministry is now asking for the money back on the basis that the verdict in favour of the joint venture partners was by a foreign tribunal and has not yet been enforced in India.
The Ministry is armed with the opinion of the Solicitor General of India, which says an award by a foreign tribunal should be enforced through a court in India before it can be implemented.
The Government has also reserved the right to file for non-enforcement of the arbitration awards, on the ground of being in violation of public policy under Section 48 of the Arbitration and Conciliation Act.
However, according to the Ravva Production Sharing Contract, if there is any dispute between parties it is arbitrated, the arbitration award is final and binding to all parties.
But the Government is saying Ravva JV needs to go for enforcement, in other words, the joint venture partners need to again go to Indian courts to enforce the award.