A Bench of Justices J.B. Pardiwala and Manmohan questioned why the government continued to oppose enforcement, particularly when India was seeking to position itself as a preferred venue for international arbitration.
| Photo Credit: The Hindu
The Supreme Court on Monday (November 2, 2026) dismissed the Union government’s challenge to a Delhi High Court order allowing mining major Vedanta Ltd. and Ravva Oil (Singapore) Pte. Ltd. to enforce foreign arbitration awards involving claims of nearly $99 million. The court questioned the Centre’s resistance to the enforcement of the awards, warning such delays could undermine India’s standing as an arbitration hub.
A Bench of Justices J.B. Pardiwala and Manmohan questioned why the government continued to oppose enforcement, particularly when India was seeking to position itself as a preferred venue for international arbitration.
“What are these arguments? You are frustrating an arbitral award like this? At the stage of enforcement of it? And we talk about all of this arbitration and seat and this and that?… Nobody will trust you,” the Bench remarked.
The Bench also took note of the prolonged nature of the dispute, pointing out that the first arbitral award was rendered in 2004, while the final award followed in 2016. It ultimately found no reason to interfere with the Delhi High Court’s July 1 judgment rejecting the Centre’s objections to the enforcement of the awards, which were passed by an arbitral tribunal seated in Kuala Lumpur, Malaysia.
“We are of the view that no error, not to speak of any error of law, could be said to have been committed by the High Court in passing the impugned judgment and order,” the Bench said, dismissing the appeal.
The dispute dates back to a 1994 production-sharing contract for the development of the Ravva oilfield in the Krishna-Godavari basin. The agreement was signed between the Union government and a consortium comprising ONGC, Videocon Petroleum, Ravva Oil and Cairn Energy. Cairn Energy’s stake in the project subsequently passed to Cairn India and later to Vedanta.
At the heart of the dispute was how payments towards costs previously incurred by the ONGC in developing the oilfield were to be accounted for while calculating the companies’ share of revenue from oil production. The matter was referred to arbitration in Kuala Lumpur under Malaysian law and the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.
Partial award
In October 2004, the arbitral tribunal delivered a partial award, deciding two of the six questions in favour of the companies and four in favour of the government, while leaving the amount payable towards the ONGC’s earlier costs to be determined later.
The Centre challenged the award in Malaysia. Although it was set aside by the Kuala Lumpur High Court in 2009, the decision was reversed on appeal and the award was ultimately upheld by the Malaysian Federal Court in 2011.
In 2014, the government sought to recover about $64 million from Vedanta and $35 million from Ravva Oil. The companies contested the demands and returned to arbitration, with a reconstituted tribunal delivering its final award in October 2016. The Centre again challenged the award, but the Malaysian Federal Court upheld it in February 2019.
Vedanta and Ravva Oil subsequently moved the Delhi High Court to enforce the awards in India. The Centre opposed the plea on grounds including limitation, public policy and the tribunal becoming functus officio after passing the earlier award.
In July, the High Court rejected the objections, holding that enforcement proceedings could not be used to reopen the underlying dispute or reconsider the tribunal’s findings. It also held that the proceedings were within the limitation period and directed the release of the companies’ bank guarantees within eight weeks.
Published – November 02, 2026 07:35 pm IST
