Modi government demands $2.8B from Reliance Industries over gas dispute
What's the story
Reliance Industries Limited (RIL) has accepted a demand notice of $2.81 billion by the Indian government.
This follows a Delhi High Court ruling, in connection with an ongoing dispute over gas migration from an Oil & Natural Gas Corporation (ONGC) block to KG-D6 consortium blocks, of which RIL is a major partner.
The Ministry of Petroleum and Natural Gas sent this demand notice after the recent judgement of the Division Bench of Delhi HC.
Legal history
RIL's legal battle: A recap
Notably, RIL had initially won this case in 2018 when an international arbitration panel ruled in favor of the company and its partners.
The company had won an arbitral award issued by an eminent international arbitration panel on July 24, 2018, against the Centre's claim on the KG-D6 Consortium, for an amount of around $1.55 billion on account of alleged gas migration from ONGC's blocks.
Later, in May 2023, the Delhi HC dismissed the Centre's appeal challenging the arbitral award.
Company stance
RIL's response to the demand
RIL has said that it intends to challenge this demand, calling it "unsustainable." They are taking measures to challenge the judgment of the Division Bench of Delhi HC. The company doesn't expect any liability on this account.
Market impact
Stock performance amid legal tussle
Following the demand, RIL's stocks fell nearly 1% yesterday but is currently in the green on stock exchanges.
The company's shares have been on a downward trend for the past three months (down by around 12%).
Meanwhile, there's been a 6% fall in the stock price in the past one month.