“The parties themselves have not been able to find a viable solution,” reads the Supreme Court’s order naming former Supreme Court judge Ranjana Prakash Desai as sole mediator in the KG Basin gas dispute between Reliance Industries and the Union government.
New Delhi: Appeals by Reliance Industries Limited (RIL) and its consortium partners against a Delhi High Court judgment that set aside an arbitral award in the consortium’s favour have been referred to mediation by the Supreme Court. On Friday, October 30, 2026, the Court named former judge of the Court Justice Ranjana Prakash Desai as the sole mediator in the KG Basin gas dispute (the Krishna-Godavari Basin gas migration dispute) with the Union government [Reliance Industries Limited v. Union of India].
The order was passed by a Bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi, after it was informed that talks between the parties had not produced a solution.
The allegation behind the contest
The dispute concerns the allegation that natural gas migrated from adjoining blocks operated by the state-owned Oil and Natural Gas Corporation (ONGC) into the KG-D6 block operated by the Reliance-led consortium off the Andhra Pradesh coast.
The Union government signed a Production Sharing Contract with Reliance Industries and Niko Resources for the KG-DWN-98/3 block in April 2000. Reliance initially held a 90% participating interest and later transferred part of its stake to BP Exploration (Alpha) Limited in 2011.
ONGC told the Directorate General of Hydrocarbons in 2013 that its reservoirs appeared to be connected with those in the Reliance-operated block. ONGC alleged that the connectivity allowed gas from its fields to move into the Reliance block, where the consortium extracted and sold it. Relying among other things on a November 2015 report of petroleum consultancy DeGolyer and MacNaughton, the Centre raised a demand of about $1.55 billion with interest against Reliance and its partners, alleging unjust enrichment. Reliance disputed the allegations and invoked arbitration under the contract.
Tribunal, High Court, Supreme Court
A three-member arbitral tribunal ruled 2:1 in favour of Reliance and its partners in July 2018, rejecting the Centre’s claim. The majority held that the contract did not bar the contractor from producing gas, whatever its source, so long as the producing wells were within the contract area. One arbitrator dissented.
In May 2023, a single judge of the Delhi High Court upheld the award. On February 14, 2025, a Division Bench of the High Court set aside both the single judge’s decision and the award, holding that the award suffered from patent illegality and was contrary to public policy. It also held that the arbitration was domestic and not an international commercial arbitration, as Reliance, the lead claimant, is an Indian entity.
Reliance Industries, BP Exploration (Alpha) Limited and Niko (NECO) Limited then appealed to the Supreme Court, which began final hearings in May 2026. The Centre has maintained that the consortium benefited from gas belonging to ONGC, while Reliance has contested the findings and sought to resolve the dispute through mediation or conciliation. On May 20, 2026, the Court declined to halt the hearing merely because the consortium intended to approach the government for mediation, indicating that the appeals could be disposed of if the sides reported a settlement.
Mediation on the Court’s terms
“The parties themselves have not been able to find a viable solution. We suggest, on their behalf, that former judge of this court Ranjana Prakash Desai be requested to act as mediator.”
Justice Desai has been requested to take the assistance of two domain experts, who may be suggested by the parties. The parties may make written and oral presentations before the mediator. The matter is expected to return to the Court after four weeks, when the parties will report on the progress of the mediation.
Attorney General R. Venkataramani, appearing for the Centre, assured the Court that the government would extend full cooperation to the mediator. Senior Advocate Kapil Sibal appeared for Reliance Industries.
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What the order leaves where it was
The order moves one of the country’s largest commercial disputes between the government and a private consortium from courtroom argument to a structured, court-appointed mediation backed by technical experts. The Court has not ruled on the merits of the appeals, and the Delhi High Court’s judgment against the consortium continues to stand unless the appeals or a settlement change it. If the mediation succeeds, the Bench has already indicated that it is willing to dispose of the appeals on that basis.
Case Title: Reliance Industries Limited v. Union of India
Bench: Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi, Supreme Court of India
Date of Hearing: October 30, 2026 (to be listed after four weeks)
Appearances: Attorney General R. Venkataramani for the Union of India; Senior Advocate Kapil Sibal for Reliance Industries Limited