New Delhi: A division bench of Delhi high court Tuesday issued a notice to the Centre asking it to file a reply on a Cairn India petition seeking to restrain the government from recovering the development cost the company had deducted from the profit made from selling crude of the Raava oil field.
Cairn India had approached the division bench of Justice Mukul Mudgal and Justice Reva Khetrapal challenging an earlier order of the court’s single bench which had rejected its petition over the pricing of crude.
Cairn India submitted that the single bench had ignored some vital points while dismissing its petition that sought to restrain the government from recovering the development cost the upstream oil company had deducted from its profit from the sale of crude from the Raava field.
The count has directed to list this matter on 15 October for next hearing.
Earlier last month, Justice S N Dhingra had rejected Cairn’s petition observing that it had not disputed the quantum of amount and the company itself had appealed against the arbitration award before a Malaysian court.
Cairn had approached a Malaysian court but failed to get a stay on an arbitration order that had upheld the Indian government’s position.
The high court had slammed Cairn saying it cannot take refuge under the Indian Arbitration Act after failing to get relief in a foreign country which it has opted for arbitration.
Cairn had deducted $55 million development cost ONGC had incurred on the field from the profit it made from selling crude. The cost was incurred before the field was sold to Command Petroleum of Australia which was later transferred to Cairn Energy of UK.
Cairn Energy India has challenged the government’s move to recover $450-500 million along with the interest by imposing Post Tax Rate of Return (PTRR) on the crude sold to state-run Hindustan Petroleum and Bongaigaon Refinery.
The Government had asked the two firms to deduct the amount from the price of oil they pay to the Cairn-led consortium.