Reliance Industries Share Price Hits 52-Week Low; Faces $2.81 Billion Demand Following Arbitral Reversal

Reliance Industries Limited (RIL) has been entangled in a legal dispute with the Government of India (GoI) regarding claims of gas migration from ONGC’s blocks in the KG-D6 basin. The conflict dates back to 2018, when an eminent international arbitration panel ruled in favour of RIL and its partners, awarding them approximately $1.55 billion against the government’s claims. However, this ruling has been subject to multiple legal challenges over the years.

Legal Developments and High Court Ruling

On May 9, 2023, a single judge of the Hon’ble Delhi High Court dismissed the GoI’s appeal challenging the arbitral award, effectively upholding RIL’s position. However, the GoI subsequently appealed to the Division Bench of the Delhi High Court. In a significant legal turn, the Division Bench has now reversed the single judge’s decision, siding with the GoI.

Government’s Demand of $2.81 Billion

Following the Division Bench’s ruling, the Ministry of Petroleum and Natural Gas has raised a demand of $2.81 billion against the Production Sharing Contract (PSC) contractors—RIL, BP Exploration (Alpha) Limited, and NIKO (NECO) Limited. The official letter of demand was received by RIL on 3 March 2025 at 11:30 a.m.

Reliance’s Response and Next Steps

RIL, in its response, has expressed its intent to challenge the Division Bench’s decision. The company maintains that both the ruling and the subsequent financial demand are legally unsustainable. RIL has sought legal advice and firmly believes that it does not bear any liability in this matter.

The company is now preparing to take further legal steps to contest the judgment and safeguard its position.

Implications for Stakeholders

This development could have wide-ranging implications for RIL’s business operations and investor sentiment. Legal battles of this magnitude can influence stock movements and create uncertainties in regulatory and corporate environments. However, RIL’s assertion that it does not expect any liability suggests that the company remains confident in its legal stance. But the share price of Reliance Industries has hit a fresh 52-week low on March 4, 2025. 

Conclusion

As this legal dispute unfolds, stakeholders will closely watch how RIL navigates the situation. The outcome of the company’s appeal against the Division Bench’s ruling will be critical in determining the next steps in this high-stakes dispute. Investors and industry observers will need to stay updated on any new legal and regulatory developments in this case.

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