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NEW DELHI : A public sector undertaking (PSU) cannot insult former judges of constitutional courts after agreeing to utilize their services as arbitrators, the Supreme Court observed on Wednesday, as it pulled up Oil and Natural Gas Corp. (ONGC) for haggling over arbitration fee.

A bench headed by Chief Justice of India N.V. Ramana noted that two retired high court judges chose to opt out of the arbitration proceedings involving ONGC and a private entity in order to avoid any embarrassment due to the PSU’s conduct.

“You (ONGC) are insulting judges because you think you have a lot of money. You think you can say anything, do anything," the bench, which also included justices A.S. Bopanna and Hima Kohli, told ONGC’s counsel after taking up the case on its own motion.

Attorney general K.K. Venugopal was also called upon by the bench to apprise the top law officer of the reason retired judges of the high court did not wish to be part of an arbitral tribunal set up by the court to resolve the dispute between ONGC and M/s Schlumberger Asia Services Ltd.

The bench read out to A-G a letter written by S.C. Dhamadhikari, a former judge of the Bombay high court, who sought to recuse himself in October as an arbitrator following a recusal by S.J. Vazifadar, former chief justice of the Punjab and Haryana high court in June.

Dharmadhikari’s letter stated that ONGC was not agreeable to pay the fee of the arbitrators as decided by the arbitral tribunal appointed by the top court in January. ONGC maintained that it would pay the fee only as per the terms of its contract with Schlumberger.

“Mr Attorney General, we want to bring to you notice the arrogance, behaviour and conduct of ONGC. We think they have a lot of money so they think they can do anything. Judges are recusing because they don’t want to be embarrassed. What is this attitude of ONGC? We want to issue a notice of contempt," the bench told Venugopal.

The court added: “They don’t have any respect for the judges. Every other day, public sector undertakings are filing frivolous cases day in and day out but they don’t want to pay fees to the judges and are making such arrogant arguments."

Venugopal said the January order of the bench had made it absolutely clear that fee shall be decided by the arbitrators and will be borne equally by all the parties and therefore, ONGC cannot insist on fee as per the contract. “It is a very embarrassing situation. No former judge will come forward to act as an arbitrator for your PSUs. You appoint your own arbitrators and don’t ask judges as arbitrators if you cannot respect them," said the bench.

As the A-G assured that he would look into the matter, the bench deferred the proceedings by a week.

Schlumberger, a Hong Kong-based company with a project office in India, is a leading oilfield service provider.

By consent of ONGC and Schlumberger, the Supreme Court had on 4 January this year appointed former Calcutta high court chief J.N. Patel and Vazifadar as arbitrators. Dharmadhikari was appointed in place of Vazifadar in July after the latter recused.

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