"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Thursday, June 9, 2011

Updates on the Gas Allocation Issue and the Indus Water Treaty Dispute

The Gas Re-Allocation Issue
Over the past few months, Directorate General of Hydrocarbons (DGH) has been asking Reliance Industries Limited (RIL) to increase its gas production in the KG D6 Field. The direction from the DGH to RIL is in the wake of a slump in the production from the said Field and the increasing demand from the industry. Due to this, the MoPNG had no other alternative but to allocate the gas from the Field to the “core” sectors and deny supply to non-core sectors such as the steel industry etc. Several steel companies such as Essar Steel Limited, Welspun Maxsteel and others had challenged MoPNG's Direction before the Delhi and the Bombay High Courts. We had covered this in three posts (here, here and here). We had noted in our latest post that the MOPNG was firm in its position on gas allocation exclusively to the core sectors.

In one of our previous posts, we had noted that the Delhi High Court refused to grant an interim stay on the MoPNG direction to allot the gas exclusively to core sectors (Direction). It may also be noted that Welspun Maxsteel and others have filed a petition before the Bombay High Court challenging the same direction. It would be prudent for the matter to be transferred to either of the two High Courts.

In the proceedings before the Delhi High Court, one of the grounds for challenging the Direction was that the MoPNG was not competent to alter the allocation of gas done by the Empowered Group of Ministers (EGoM). Consequently, the counsel of Essar Steel reportedly prayed the court to order the matter to be decided by the EGoM. The Business Standard reports that even the court was of the opinion that it was better if the EGoM made a decision. An EGoM meeting was scheduled to be held on 9 June 2011. However, the meeting was cancelled. Ultimately, the Additional Solicitor General agreed to have the matter decided by the EGoM. The order of the Delhi High Court dated 3 June 2011 notes: “Mr. A.S. Chandhiok, learned ASG states that the stand of the EGOM in the matter will be made explicit by an affidavit to be filed on its behalf on or before 4th July 2011.”

Kishanganga Dispute between India and Pakistan
A 10 member court of arbitration, alongwith observers from India and Pakistan would inspect the Kishanganga project on 18 June. We have been providing updates on the issue. All the posts on this issue can be accessed from this label.

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