The Supreme Court last week set aside a Delhi high court judgment holding that the high court had no power to entertain an international arbitration petition in the appeal case, Videocon Industries Ltd vs Union of India. A production sharing contract was entered into between the government and a consortium of four companies consisting of ONGC, Videocon, Cairn Energy of UK and Ravva Oil of Singapore. The contract was for exploration and mining of hydro carbon resources in the territorial waters and exclusive economic zones of India. Later, disputes arose between the parties over cost recoveries and profit.
They were referred to an arbitral tribunal which was to be held in Kuala Lumpur. But due to an epidemic there, the proceedings were first shifted to Amsterdam and then to London. The government wanted the proceedings to be in Kuala Lumpur. But this request was rejected by the tribunal. So the government moved the Delhi high court with the same request. The high court allowed the prayer, maintaining that Indian courts have jurisdiction in the matter. On appeal, the Supreme Court ruled that the high court had no jurisdiction in this international agreement.
Video con Industries Ltd. Vs Union Of India & Anr. on 11 May, 2011 (Supreme Court)
