Bombay High Court. Photo by Girish Srivastava/HT
Bombay High Court. Photo by Girish Srivastava/HT

In relief for ONGC, HC rejects Reliance Naval’s plea on vessels deal

RNEL, which is controlled by Reliance Infrastructure Ltd, had in its petition said ONGC has refused to take delivery of the eighth vessel and also invoked a bank guarantee

Mumbai: The Bombay high court has rejected a writ petition filed by Reliance Naval and Engineering Ltd (RNEL) against Oil and Natural Gas Corp. (ONGC) after the oil explorer ended a deal for the supply of a dozen vessels to support offshore oil exploration. The ruling has come as a major relief for ONGC.

RNEL, which is controlled by Reliance Infrastructure Ltd, had in its petition said ONGC has refused to take delivery of the eighth vessel and also invoked a bank guarantee. The high court ruled that when there is a clause giving the parties to the agreement the option of going for arbitration, the companies must do so rather than filing cases in court.

“We are of the considered view that this can be done in the arbitration proceedings, which are provided under the contract if the parties choose to do so or in the civil suit if the petitioner (RNEL) desires to take recourse to the same," ruled a bench comprising justices B.R. Gavai and Riyaz I. Chagla. “In that view of the matter petition is rejected, relegating petitioner to the ordinary remedy available to it in the law," it said.

The company, part of billionaire Anil Ambani’s diversified Reliance Group, was seeking a refund of more than $6.6 million (about 45 crore), which ONGC invoked as performance bank guarantee, along with $15.46 million as payment for eighth offshore vessel that it built for India’s largest explorer. RNEL also sought court’s intervention to direct ONGC to take delivery of the eighth vessel.

“Undisputedly, in the present case, the vessels were not delivered to respondent (ONGC) within a period of 30 months as provided in the contract," the court observed in its order of 30 November.

Email queries to ONGC and RNEL did not elicit any response till press time.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.

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