Law & Justice

Centre Challenges Supreme Court Hearing on Vedanta’s $99 Million Ravva Oilfield Arbitration Enforcement

By Krishna Yadav

The Union government has asked the Supreme Court to review a Delhi High Court ruling that allowed Vedanta Ltd and Ravva Oil (Singapore) Pvt Ltd to enforce foreign arbitration awards related to the Ravva oilfield dispute, which involves claims of $99 million. A bench of Justices J.B. Pardiwala and Manmohan will hear the Centre’s appeal on Monday, as listed in the Court’s cause list.

The Centre contests the Delhi High Court’s 1 July 2026 judgment that rejected its objections to the enforcement of the awards. The High Court also ordered that the bank guarantees provided by Vedanta and Ravva Oil be released within eight weeks.

The dispute dates back to 1994, when the government entered into a production‑sharing contract (PSC) with a consortium of Oil and Natural Gas Corporation (ONGC), Videocon Petroleum, Ravva Oil and Cairn Energy to develop the Ravva oilfield in the Krishna‑Godavari basin. Cairn Energy’s interest later passed to Cairn India, which merged with Vedanta. The core issue was how payments made by the companies toward ONGC’s historical costs should be accounted for when calculating each party’s share of revenue from oil production, known as the ONGC Carry issue.

The PSC required disputes to be referred to arbitration in Kuala Lumpur, Malaysia, under Malaysian law and the UNCITRAL Arbitration Rules. A partial award on 12 October 2004 ruled in favour of the companies on two of six issues and in favour of the government on the remaining four, leaving the ONGC Carry issue unresolved and reserving jurisdiction for a final decision.

The government challenged the partial award in Malaysian courts. The Kuala Lumpur High Court initially set it aside in January 2009, but the Malaysian Court of Appeal restored it in September that year, and the Federal Court upheld it in October 2011.

In July 2014, the government issued show‑cause notices seeking $64 million from Vedanta and $35 million from Ravva Oil, threatening to recover the amounts from proceeds payable to the companies from oil sales. The companies disputed the claim and sought a tribunal determination of the outstanding amount under the ONGC Carry issue. The tribunal issued its final award on 26 October 2016. The government challenged this award, but the Malaysian Federal Court upheld it on 28 February 2019.

Vedanta and Ravva Oil then approached the Delhi High Court to enforce the 2004 partial award and the 2016 final award in India. The Centre opposed the plea, arguing that the awards should not be enforced. The High Court rejected the government’s objections, holding that an enforcement court could not reopen the merits of the dispute or reconsider the tribunal’s findings merely because the government disagreed. It dismissed the Centre’s objections and allowed the companies’ plea, directing that their bank guarantees be released within eight weeks.

The Ravva dispute is not the only legal battle involving Vedanta’s oil and gas business. In a separate dispute over the CB‑OS/2 offshore block in Gujarat’s Cambay Basin, the company is challenging the Centre’s decision not to extend its contract for another ten years and to hand over operations to ONGC. The Delhi High Court reserved its judgment on Vedanta’s appeal on 1 October 2026.

Mint’s queries to Vedanta and the ministry of petroleum and natural gas remained unanswered at the time of publishing. The article was written by Krishna Yadav, a Senior Correspondent at Mint based in New Delhi, who reports on legal and regulatory developments in corporate India.