The Supreme Court on Monday criticised the Central government for frustrating the enforcement of decades-old foreign arbitral awards in favour of Vedanta Limited and Ravva Oil (Singapore) Pte Limited, warning that such litigation would undermine confidence in India's arbitration regime. [GoI v. Vedanta]
A Bench of Justices JB Pardiwala and Manmohan questioned the government's approach to enforcing arbitral awards while hearing its challenge to a Delhi High Court judgment permitting enforcement of awards passed in 2004 and 2016.
"What are these arguments? You are frustrating an arbitral award like this? At the stage of enforcement of it?" the Court remarked.
The Bench also questioned the government's commitment to arbitration, referring to discussions about arbitration at conferences and seminars even as parties continued to resist enforcement of awards.
"And we talk about all of this arbitration and seat and this and that," the Court observed.
The Bench warned the government that such litigation could erode confidence in the arbitration process.
"Nobody will trust you," the Court remarked.
The dispute arose from a 1994 production sharing contract between the Central government and a consortium of companies for developing the Ravva oil field in the Krishna-Godavari Basin. Disputes over the interpretation of the contract led to arbitration in Kuala Lumpur. In October 2004, the arbitral tribunal passed a partial award, leaving the issue of quantification unresolved. The award was eventually upheld by the Malaysian Federal Court in 2011.
In July 2014, the government issued show-cause notices seeking recovery of approximately $99 million from the companies. A reconstituted tribunal subsequently passed a final award in October 2016. The government opposed enforcement, citing limitation, public policy and the tribunal becoming functus officio.
On July 1, 2026, Delhi High Court Justice Jasmeet Singh rejected these objections, holding that the enforcement petition was within limitation and that the tribunal had retained jurisdiction over quantification. The High Court also directed the release of bank guarantees.
During the hearing, the Bench questioned the prolonged nature of the dispute, noting that the first arbitral award had been passed in 2004 and that the final award was delivered in 2016.
The Court also referred to the High Court's observations concerning the reconstitution of the arbitral tribunal after the government issued a show-cause notice seeking recovery of money from the companies.
Ultimately, the Bench found no reason to interfere with the High Court's findings.
"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 Court said while dismissing the appeal.
Additional Solicitor General Vikramjeet Banerjee appeared for the Central government.
Senior Advocates Mukul Rohatgi and Akhil Sibal had appeared for Vedanta and Ravva Oil before the Delhi High Court.