SC appoints former judge to mediate $2.81 billion Reliance-Centre KG-D6 gas dispute

The Supreme Court on Friday appointed former judge Justice Ranjana Prakash Desai to mediate the $2.81 billion dispute between a Reliance Industries Ltd-led consortium and the Centre over alleged extraction of natural gas from ONGC’s fields.

The decision came after both sides informed the bench led by Chief Justice of India Surya Kant that there had been no progress in settlement efforts and that they had no objection to the appointment of a mediator.

“Let Justice Ranjana Prakash Desai be the mediator. She handles complex commercial disputes well. Let an expert from each side also assist her,” the Chief Justice said.

Senior counsel Kapil Sibal, representing the consortium of Reliance Industries, the UK’s British Petroleum Exploration and Canada’s Niko (which exited the business in December 2019), agreed to the mediation without any objections.

“We have no problem with mediation. A mediator can be appointed,” Sibal told the court.

Also Read | SC allows Reliance, Centre to pursue conciliation in 13-year-old KG-D6 row

CJI Surya Kant also instructed both sides to set a date and time with the mediator as per her convenience. The court has not fixed a timeline for the mediation. It will hear the matter after four weeks to assess the progress made.

The consortium made a plea for conciliation on 20 May. The apex court and the attorney general representing the government declined and insisted on hearing the arguments before taking a decision. After five days of hearing, the bench accepted Reliance’s plea for conciliation.

The dispute is centred on allegations by the Centre that the consortium had extracted gas that migrated from blocks operated by state-run Oil and Natural Gas Corp. in the Krishna‑Godavari basin off India’s east coast. The consortium was awarded the adjacent KG‑D6 block in 2000.

Reliance controls 66.67% of the project while BP owns 33.33% after Niko exited its 10% stake.

Significant migration

During the hearing, Reliance maintained that gas naturally migrates between reservoirs and that the consortium had extracted it from within its contract area.

Also Read | How RIL-Centre dispute over KG-D6 output may be resolved in 2026

The case dates back to 2013, when ONGC first suspected the KG-D6 block may be connected to its adjacent KG-D5 and G-4 blocks. It accused Reliance-BP of extracting gas belonging to its blocks.

The two sides appointed US consulting agency DeGolyer and MacNaughton in 2014 to investigate the matter. The consultant concluded that there was indeed significant migration of gas from ONGC’s blocks, which was pumped out by the consortium from 2009 to 2015.

The government subsequently formed a committee headed by former Delhi High Court chief justice A.P. Shah to examine the findings. Based on the committee’s recommendations, the petroleum ministry raised a demand of about $1.55 billion against Reliance and its partners in November 2016, alleging that they had been unjustly enriched by extracting gas that belonged to the government. Reliance invoked arbitration.

In July 2018, a three-member arbitral tribunal ruled 2:1 in favour of the Reliance-led consortium. The majority held that the consortium was allowed to extract all gas available within its contract area, even if it had migrated from an adjoining block. The tribunal’s decision was challenged by the Centre before the Delhi high court.

Also Read | KG-D6 row: Niko tells SC ONGC didn’t develop fields, rejects gas theft claim

In May 2023, a single judge of the Delhi high court upheld the arbitral award, rejecting the government’s challenge. However, in February 2025, a division bench overturned that decision and set aside the award.

Following the judgment, the petroleum ministry raised a fresh demand of $2.81 billion against Reliance, BP Exploration and Niko in March 2025. The consortium subsequently moved the Supreme Court, challenging the high court’s decision.