RIL shares dip on legal tussle with govt.

Centre avers deal with Aramco can’t proceed till Indian major clears $3.5 bn dues

Shares of index heavyweight Reliance Industries (RIL) were the second worst performer among Sensex stocks on Monday as a possible legal battle with the government threatens to disturb the company’s stake sale plans with Saudi Aramco, which is also the world’s largest listed entity.

On the BSE, RIL shares lost nearly 3% in intraday trade to touch a low of ₹1,555 on Monday. However, the counter managed to partially recoup losses to close at ₹1,571, down 1.78% or ₹28.40 over Friday’s close.

Given its weightage in the Sensex, RIL was the biggest drag on the benchmark on Monday when the index lost 39 points to end at 41,642.66.

Market participants attributed the fall to reports that the listed entity and the government are headed towards a bitter battle in the courts after the latter said that the RIL-Aramco deal cannot go ahead till the Indian company clears pending dues amounting to $3.5 billion related to Panna-Mukta and Tapti oil and gas fields. RIL, however, is strongly contesting the claims and has said that “the petition is an abuse of process as no arbitration award has fixed any final liability of dues on the company.”

“... it portrays that a sum of money is due and payable under the final award and purports to compute the money payable on a basis neither found in the arbitration award nor disclosed in the petition,” RIL stated in its affidavit.

An international arbitration tribunal issued a partial award in October 2016 in the dispute between the Indian government, BG Exploration & Production India Ltd (BG) and RIL on the contracts.

While the tribunal in its 2016 award determined certain issues of principles, it did not award any monetary sum pending determination of all issues before it.

BG and RIL challenged the 2016 award before an English court which decided some parts of the challenge in favour of the duo and directed the arbitration tribunal to reconsider those parts of the 2016 award.

The tribunal, having reconsidered, issued another partial award in December 2018 in favour of BG and RIL. RIL’s contention is that while this challenge was pending in the English court, the Indian government had ‘unilaterally’ calculated certain amounts.

(With inputs from PTI)

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Printable version | Feb 25, 2020 6:51:28 PM |

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