SC revokes appointment of Australian arbitrator in RIL dispute

The Supreme Court today revoked the appointment of Australian judge James Jacob Spigelman as the third arbitrator to head a three-member arbitration panel to decide on the dispute between Reliance Industries and the government over investments in the KG-D6 gas field.

A bench headed by Justice S S Nijjar recalled the order after the government cited that the name of Spigelman, a former Chief Justice and Lieutenant Governor of New South Wales, figured in the list of seven suggested by RIL for appointment as the third arbitrator.

The government counsel raised the issue in the court today, arguing that it should have opted for someone who was not in the list of probables suggested by either the government or RIL.

RIL and the government had nominated former chief justices S P Bharucha and V N Khare, respectively, but were divided on the selection of the third arbitrator.

The arbitration process was stuck over appointment of the third member after RIL contended that the appointment of an Indian judge will be prejudicial to RIL's interests.

Reliance Industries had, in August 2013, moved the Supreme Court, seeking an order to name a non-partisan arbitrator in the KG Basin case. It had also submitted a list from which the court can select a third arbitrator.

The Supreme Court, which on Monday announced the appointment of Spiegelman as the presiding arbitrator, 28 months after Reliance Industries filed case, today accepted the government's view and recalled its order (See: SC appoints Australian as third arbitrator in RIL gas dispute).

Justice Nijjar said the court would soon appoint a new arbitrator in place of Spiegelman.

Mukesh Ambani-led Reliance Industries initiated the arbitration after the government disallowed recovery of the expenditures RIL claims to have incurred in raising production levels at the KG-D6 blocks off the east coast where production has been falling continuously.

The petroleum ministry disallowed $1.8 billion that RIL claims to have invested in the gas fields as it apprehended foul play by Reliance by suppressing output for recovery at a more convenient time later.