UNION OF INDIA vs RELIANCE INDUSTRIES LIMITED & ORS.

2025-02-14 Information

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: January 27, 2025
% Pronounced on: February 14, 2025

+ FAO(OS) (COMM) 201/2023
UNION OF INDIA …..Appellant
Through: Mr. R. Venkatramani, AGI, Mr. K.K. Venugopal & Mr. Gopal Jain, Senior Advocates with Mr. Amit Dhingra, Mr. Rohit Mahajan, Mr. Siddharth Agrawal, Ms. Kesang Tenzin Doma, Ms. Sayanti Chatterjee, Mr. Abhishek Kr. Pandey & Mr. Raman Yadav, Advocates.

versus

RELIANCE INDUSTRIES LIMITED & ORS. …..Respondents
Through: Mr. Harish N. Salve, Senior Advocate with Mr. Sameer Parekh, Mr. Ishan Nagar, Mr. Abhishek Thakral, Ms. Sonali Basu Parekh, Ms. Ruchi Chauhan, Ms. Aditi and Ms. Chetna Kai, Advocates for R1.
Ms. Niyati Kohli, Mr. Nilay Gupta and Ms. Tarini Khurana Advocates for R2.
Mr. K. R. Sasiprabhu, Mr. Parth Rishik, Mr. Vishnu Sharma A.S. and Mr. Mohammed Ilyas, Advocates for R3.

CORAM:
HON’BLE MS. JUSTICE REKHA PALLI
HON’BLE MR. JUSTICE SAURABH BANERJEE

J U D G M E N T

TABLE OF CONTENTS

HEADINGS PAGE NUMBER

Premise:…03
Factual Narrative:.03
Genesis involved:…05
Arbitral Proceedings:08
Arbitral Award [Majority (2:1)]: learned Arbitral Tribunal:..09
Dissenting Award: 3rd Sole Arbitrator:.13
Section 34, The Arbitration and Conciliation Act, 1996 proceedings:…16
Section 37, The Arbitration and Conciliation Act, 1996 proceedings:…18
Submissions of the Union of India:18
Submissions of Reliance Industries Limited:24
Rejoinder submissions of the Union of India:..28
Analysis and Reasoning:..30
Scope, intent and application of Section 37, The Arbitration and Conciliation Act, 1996:.31
International Commercial Arbitration:.39
Patent Illegality:45
Findings and Conclusions:..77

SAURABH BANERJEE, J.

Premise:
1. The Union of India (through the Ministry of Petroleum & Natural Gas of the Government of India)1, by virtue of the present appeal under Section 37 of the Arbitration and Conciliation Act, 19962 read with Section 13(1) of the Commercial Courts Act, 2015, seeks to assail the order dated 09.05.20233 passed by the learned Single Judge in O.M.P. (COMM) 487/2018, whereby the application under Section 34 of the Act preferred by it, against the Arbitral Award dated 24.07.20184 rendered by a 2:1 majority of the Arbitral Tribunal5 was rejected by the learned Single Judge.
Factual Narrative:
2. The UOI on 12.04.2000, entered into a Production Sharing Contract6 with both M/s. Reliance Industries Limited7, who is the respondent no. 1 before us and one Niko Limited8, who is the respondent no. 3 before us, in respect of Block Kg-DWN-98/3 situated in the Krishna-Godavari Basin off the coast of Andhra Pradesh9, with a Participating Interest of 90% and 10% respectively. Soon thereafter, by way of a supplementary contract dated 21.02.2011, RIL transferred a portion of its Participating Interest under the PSC in favor of one British Petroleum Exploration Limited10, the respondent no. 2 before us.
3. In the said PSC, RIL and Niko as the contractor had the right to take Cost Petroleum in accordance with the provisions of Article 15 of the said PSC; the right to take its Participating Interest share of Profit Petroleum in accordance with the provisions of Article 16 of the same PSC; the right to receive its Participating Interest share of any incidental income and receipts arising from Petroleum Operations and the obligation to contribute its Participating Interest share of cost and expenses including Contract Cost.
4. The UOI, also entered into another PSC with one Cairn Energy India Limited11 in respected of the Block KG-DWN-98/2 and also with Oil and Natural Gas Corporation Limited12 qua Block KG-OS-IG. Later on, ONGC acquired rights from CEIL qua Block KG-DWN-98/2. Interestingly, both the Block KG-OS-IG and Block KG-DWN-98/213 turned out to be adjoining blocks to the Reliance Block.
5. On 25.09.2000, RIL was granted a Petroleum Exploration License14 qua the Reliance Block w.e.f., 07.06.2000 for a period of seven years, whereafter, from September 2001 till March 2002, RIL carried out 3D seismic survey in the Reliance Block and notified it to the UOI.
6. On 26.11.2002, preliminary results qua Original Gas in Place15 was prepared by one M/s. DeGolyer and MacNaughton16 and forwarded by RIL to the UOI. The above was then followed by a Final Report by the very same D&M to the Director General of Hydrocarbons17 on 31.01.2003.
7. Thereafter, though, the very same D&M also submitted an Appraisal Report on 06.11.2003 for Niko18 however, the same was neither forwarded to the UOI nor the DGH.
8. Thereafter, on 26.05.2004 RIL submitted an Initial Development Plan19 qua 3 wells, i.e., Well 1 (D1), Well 2 (D2) and Well 3 (D3) situated in the Reliance Block, to the UOI. The said IDP was approved by the UOI in November 2004. Subsequently, RIL submitted an addendum to the above IDP20 on 20.10.2006 to the Management Committee appointed in terms of Article 6 of the PSC, who eventually approved it in December 2006 itself.
9. It was only then on 01.04.2009 that RIL commenced commercial production of gas in the Reliance Block in accordance with the two aforesaid approvals granted to it in IDP and AIDP.
Genesis involved:
10. It was during the existence of PSC and though RIL was working in the Reliance Block and the ONGC was working in the ONGC Block, certain disputes arose, whence ONGC addressed a letter dated 22.07.2013 to the UOI stating that there was evidence of lateral continuity of gas pools inter-se the Reliance Block and the ONGC Block i.e., the blocks were connected and there was migration of gas inter-se them.
11. The above led to filing of W.P.(C) 3054/2014 by ONGC before this Court against the UOI and RIL, primarily claiming that since the gas reservoirs of the Reliance Block and the ONGC Block were inter-connected, it resulted in the migration of natural gas, and that RIL had been unjustly enriched by producing and selling the migrated gas from the ONGC Block.
12. In the meanwhile, during the pendency of the said W.P.(C) 3054/2014, ONGC and RIL entered into an Agreement for Project Management of Independent Third-Party Study without prejudice to the rights and contentions of the parties under the PSC, appointing D&M vide letter of Award dated 03.07.2014 to undertake an independent third-party study of the alleged continuity and migration of gas, as contended by the ONGC, inter-se, the Reliance Block and the ONGC Block. The DGH was also appointed as a Facilitator thereof.
13. Later on, a learned Single Judge of this Court vide order dated 10.09.2015, disposed of the said W.P.(C) 3054/2014 with certain directions to the parties for co-operating with D&M and also to furnish all information so required by the D&M for the study of connectivity, and furthermore that UOI would take a decision within a period of six months of the submission of the D&M Report qua the issue of alleged connectivity and migration of gas, as raised by ONGC therein.
14. The relevant portion of the said order dated 10.09.2015 passed by the learned Single Judge of this Court in said W.P.(C) 3054/2014 is as under:-
18. Accordingly, the petition is disposed of with the following directions:
(I) All parties concerned shall co-operate fully with M/s. DeGolyer & MacNaughton, being the independent agency appointed by the respondent No.1 UOI, and shall promptly furnish all information, particulars and data required to enable and assist the said agency to submit the report as soon as possible;
(II) Upon report being submitted, copies thereof would be supplied to the interveners, petitioner, respondent No.3 RIL and / or such other persons who may be found entitled thereto;
(III) The interveners, petitioner as well as the respondent No.3 RIL would be entitled to make their representations to the Government of India with respect to the said report and the Government of India shall, for taking decision on the action if any required on the said report, follow such procedure as it may be required to take and deem necessary, having regard to the principles of transparency, fairness and natural justice;
(IV) The respondent No.1 UOI shall take a decision on the action to be taken on the basis of the report aforesaid within a period of six months of the submission thereof by M/s. DeGolyer & MacNaughton;
(V) The party/s remaining aggrieved from the decision so taken / not taken by the respondent No.1 UOI / Government of India shall have remedies in accordance with law;
(VI) The petitioner as well as interveners are also granted liberty to, if feel the need, apply for revival of this petition, subject of course to all the pleas of the respondents, including as already taken and as to the very maintainability of this petition. This direction shall however not dilute in any manner the directive aforesaid of the Government of India to the PSUs.

15. Thereafter, the D&M submitted its Final Report dated 19.11.201521 concluding that the integrated analyses indicated connectivity and continuity of the reservoirs across the blocks operated by ONGC and RIL. It is for these reasons that the UOI constituted a single member committee of Honble Mr. Justice A.P. Shah (Retd.)22 to consider the D&M Report 2015 and to recommend a future course of action in light of the findings therein. However, RIL aggrieved by the stand taken by the DGH before the Shah Committee addressed a letter to the UOI, and withdrew its participation in the hearings before the said Shah Committee.
16. Thereafter, on 29.08.2016 the Shah Committee issued its Final Report, based whereon, the UOI raised a Demand Notice, for USD 1,552,071,067.00 as computed provisionally along with interest till 31.03.2016 and of USD 174,905,120.00 towards revised additional cumulative Profit Petroleum claimed to be receivable till 31.03.2016, for disgorgement of unjust enrichment claimed to have been made by RIL due to the migration of gas, upon RIL.
Arbitral Proceedings:
17. In response, RIL, invoking the arbitration clause in terms of Article 33 of the PSC, issued a Notice of Arbitration dated 11.11.2016 to the UOI. Whereafter, the 3 member AT was constituted, before whom RIL in its Statement of Claim sought the following reliefs: –
191.1. Declaring that Contractor has produced all hydrocarbons from its Contract Area by conducting Petroleum Operations reviewed and approved by GOI;
191.2. Declaring that Contractor has the right to produce all hydrocarbons from wells drilled in its Contract Area by conducting Petroleum Operations reviewed and approved by GOI, which may include hydrocarbons that could have migrated to those wells from an adjacent block;
191.3. Declaring that Contractor is entitled to retain all benefits from, and cost recover for, the production referenced in paragraphs 191.1 and 191.2 above in accordance with the provisions of the PSC;
191.4. Declaring that Contractor has paid GOI both Profit Petroleum and royalty for the production referenced in paragraphs 191.1 and 191.2 above in accordance with the provisions of the PSC;
191.5. Declaring that Contractor has paid GOI both Profit Petroleum and royalty for the production referenced in paragraphs 191.1 and 191.2 above in accordance with the provisions of the PSC;
191.6. Declaring Contractor paid GOI both Profit Petroleum and royalty for the production referenced in paragraphs 191.1 and 191.2 above in accordance with the provisions of the PSC and is therefore estopped from pursuing a claim for unjust enrichment against Contractor;
191.7. Declaring that GOI has no right to restitution or other relief, not having suffered any injury or other compensable harm resulting from Contractor’s production of hydrocarbons that allegedly migrated to Contractor’s wells in its Contract Area from the adjacent ONGC Blocks;
191.8. Ordering GOI to reimburse all of Contractor’s costs incurred in connection with this arbitration, including fees and expenses of the arbitrators, legal counsel, witnesses, experts, and consultants;
191.9. Ordering GOI to pay Claimant simple interest of an amount as determined by the Tribunal on any amounts from the date of the award until the date of payment; and
191.10. Ordering that the award be immediately enforceable, notwithstanding commencement or pendency of any action to set it aside or of any other proceeding.

18. In response thereto, first the UOI filed a simpliciter Statement of Defense, however, later raised Counter Claims as well.
Arbitral Award [Majority (2:1)]: learned Arbitral Tribunal:
19. Based upon the pleadings before it, learned AT, framed the following twelve issues:-
1) Whether the Claimants rights and obligations under the PSC to conduct Petroleum Operations in the Contract Area prohibit the Claimant from producing and selling gas which migrated into the sub-sea reservoir lying within the Contract Area from a source outside the Contract Area?
2) [If the answer to (1) is YES;] Whether the Claimant is obliged to seek and obtain express permission to produce and sell migrated gas and if so, whether the Claimant obtained such permission?
3) Whether the Claimant produced and sold gas which migrated into the sub-sea reservoir lying within the Contract Area from a source outside the Contract Area. If so, to ascertain quantity?
4) Whether the Claimant produced and sold gas from the sub-sea reservoir lying within the Contract Area which extends beyond the Contract Area. If so, to ascertain quantity?
5) [If the answers to (3) or (4) is YES;] Whether the Claimant is entitled under the PSC to retain or recover:
i. cost petroleum;
and/ or
ii. profit petroleum, from the production and sale of such gas.
6) [If the answer to (5) is NO] Whether the Claimant has been unjustly enriched;
B. Disclosure of the 2003 D&M Report.
7) Whether the Claimant is obliged under Articles 10, 12 and 26 of the PSC to:
a. Make disclosure of the 2003 D&M Report to the Respondent.
b. Provide information and data as well as all interpretative and derivative data, including reports, analysis, interpretations and evaluations prepared in respect of Petroleum Operations, including interpretation and analysis, relating to connectivity of the reservoirs and/ or continuity of the channels across in the boundary of Block KG- DWN-98/3.
8) [If the answer to Issue (7) is YES;] Whether the Claimant had complied with such obligation.
9) [If the answer to (8) is NO;] Whether the non-compliance amounts to a material non-disclosure constituting a breach by the Claimant of the PSC and the PNG Rules?
10) [If the answer to Issue (9) is NO;] Whether this prevented the Respondent from directing a joint development under Article 12 of the PSC or Rule 28 of the PNG Rules?
11) Whether the 2003 D&M report establishes connectivity of the reservoirs and/or continuity of the channels in Block KG- DWN-98/3 and the IG Block?
12) Whether the 2015 D&M Report establishes connectivity of the reservoirs and/or continuity of the channels in Block KG-DWN-98/3 and ONGCs Blocks (the IG Block and Block KG-DWN-98/2)?

20. While dealing with the aforesaid issues, the learned AT in 2:1 majority rendered an Arbitral Award, primarily by holding as under:-
20.1. Issue no.1: As per the learned AT there was no express prohibition against RIL from extracting the migrated gas within the contract area/ development area. Also, that the UOI may require unitization or a joint development if it takes the view that the Reservoir can be more efficiently developed together on a commercial basis for securing the more effective recovery of Petroleum from such Reservoir . In effect, the UOI would not be required to make such an order of joint development until, it is satisfied that joint development is commercially more efficient. Besides that, the learned AT also rendered that the terms of the PSC read together with Petroleum and Natural Gas Rules, 195923 make explicit that RIL as the contractor, licensee and lessee, is permitted and required to extract all available gas within its contract area/ development area for the benefit of the UOI, even if, such gas has migrated from beyond the Contract Area.
20.2. Issue no.2: As per the learned AT, RIL did not need any further express permission to produce and sell any migrated gas that could have come into its Contract Area.
20.3. Issue nos.3 and 4: As per the learned AT, there was connectivity of reservoirs, as such the gas produced by RIL did include the gas which had migrated into the reservoir lying within the Contract Area from a source outside the Contract Area.
20.4. Issue no.5: As per the learned AT, RIL was entitled to all rights granted to it under the PSC. It was entitled to retain and recover Cost Petroleum from the gas so extracted, produced and sold.
20.5. Issue no.6: In view of the aforesaid finding in issue no.5, as per learned AT, RIL was not unjustly enriched.
20.6. Issue no.7: As per learned AT, RIL was required to disclose not only D&M 2003 Report but also, all data stipulated in Article 26.1 of the PSC, inclusive of all interpretive and derivative data, including reports, analysis, interpretations and evaluations prepared in respect of petroleum operations; and also interpretation and analysis relating to connectivity of the reservoirs and/ or continuity of the channels across in the boundary of the Reliance Block.
20.7. Issue no.8: In view of the aforesaid finding in issue no.7, as per the learned AT, RIL had failed to comply with the requirements under Article 26.1 of the PSC since, it failed to provide the D&M 2003 Report to the UOI.
20.8. Issue no.9: As per the learned AT, despite having numerous opportunities to order joint development inquiry, the DGH declined to do so notwithstanding the vast amounts of interpretive data provided by RIL to DGH. It is because of this, non-compliance by RIL of the terms of the Article 26.1 of the PSC, did not amount to a material non-disclosure constituting a breach by the RIL of the PSC and 1959 PNG Rules.
20.9. Issue no.10: As per learned AT, the failure of RIL to disclose the D&M 2003 Report did not prevent the UOI from directing a joint development under Article 12 of the PSC.
20.10. Issue no.11: As per the learned AT, since the D&M 2003 Report was not intended to be a scientific investigation or examination of the operations of the Project, therefore, there is no basis for D&Ms belief that there was continuity or connectivity of the reservoirs. Thus, the D&M 2003 Report only suggests the connectivity of reservoirs and the learned AT could not find anything in the said D&M 2003 Report that established connectivity of reservoirs.
20.11. Issue no.12: As per learned AT, although gas migration estimates made in D&M 2015 Report were highly unreliable, grossly inaccurate and exaggerated, however, there was sufficient evidence to show there was some degree of connectivity.
Dissenting Award: 3rd Arbitrator:
21. The 3rd Arbitrator of the learned AT gave a dissenting Award, wherein the issues involved were divided into four parts after observing as under:-
21. For the purpose of my opinion, I have divided the issues into four parts. Part-1 deals with the question whether the claimant’s right and obligations under the PSC to conduct Petroleum Operations in the Contract Area prohibit it from producing and selling gas which migrated into the subsea reservoir lying within the Contract Area from a source outside the Contract Area and if this answer to this question is in affirmative, whether the claimant was under an obligation to seek and obtain express permission to produce and sell migrated gas and whether the claimant had in fact obtained such permission. Part-II deals with the question whether the claimant produced and sold gas which migrated into sub-sea reservoir lying within its Contract Area from a source outside that area, if so, to ascertain quantity of such gas. If these 2 issues are decided in affirmative then the next question is whether the claimant is entitled to retain or recover cost petroleum and/or profit petroleum from the production and sale of such gas. The related issue is whether it is a case of unjust enrichment by the clamant. Part-III addresses the Respondent’s allegation that the claimant is guilty of suppression of the facts and in particularly D&M report of 2003, as averred in the counter claim. This takes care of Issues Nos. 7 to 12. Part-IV relates to the conclusions of the findings recorded under Part-J, II and Ill and the cost of arbitration.

20.1. Part I: As per the dissenting Award, since the PSC was executed inter-se the Government of India/ UOI and RIL under Article 297 of the Constitution of India24 and other statutory provisions and in light of what has been held by the Honble Supreme Court in Reliance Natural Resources Ltd. [RNRL] vs. Reliance Industries Ltd. [RIL]25, RIL could not have extracted the natural gas without the express permission of the Union of India, which permission can be granted only pursuant to a rationally framed utilization policy , and since D&M was itself commissioned in 2015 to determine the question of migrated gas, permission sought prior thereto was not relevant or relating to the migrated gas.
20.2. Further, as per the dissenting Award, under the PSC if a reservoir extends beyond Block boundaries, RIL may either seek permission to enlarge its Development Area, or jointly develop the area with the contractor of the adjoining block i.e., ONGC Block, or relinquish its rights to such reservoir, and there can be no effective lease or enjoyment of an area covered by a reservoir, if such reservoir is being drained by a different person/ entity on its block boundary namely by RIL of the ONGC Block.
20.3. Part II: As per the dissenting award, since RIL had participated in the 2015 D&M Report proceedings and was aware of the methodology of the study and did not object to it at the relevant point of time, it was estopped from urging anything to the contrary as also, in view of the Article 33.2 of the PSC the D&M 2015 was binding upon RIL. Moreover, since the D&M 2015 Report was binding on the parties, the quantification of migrated gas determined therein was conclusive.
20.4. Part III: As per the dissenting Award, RIL was obligated under the PSC and the 1959 PNG Rules to disclose the D&M 2003 Report along with all data relating to continuity or connectivity which the RIL failed to do. Although the said D&M 2003 Report may not have conclusively established reservoir connectivity, it strongly suggested the same. Accordingly, the said non-disclosure was material in nature.
20.4. Part IV: As per the dissenting Award, in view of the findings in Part I, as also the principle of unjust enrichment, RIL was indeed unjustly enriched.
Section 34, The Arbitration and Conciliation Act, 1996 proceedings:
21. Aggrieved by the findings in the majority Arbitral Award rendered by the learned AT, the UOI filed an application under Section 34 of the Act for setting aside the majority Arbitral Award wherein, it primarily urged that firstly, the said Arbitral Award suffers from patent illegality since, despite the learned AT having rendered that RIL was in breach of the Article 26.1 of the PSC, went on to hold that it was not a material breach, particularly whence, RIL was guilty of suppressing D&M 2003, D&M 2004 and D&M 2005 Report(s) and due to the said suppression on the part of RIL, the DGH/ UOI was not able to exercise its options of joint development of the Reliance Block and the ONGC Block; secondly, that the said Arbitral Award is in conflict with the Public Policy of India as the learned AT erred in holding that RIL cannot be made accountable for extracting and selling gas outside the Contract Area since this proposition is in the teeth of the Public Trust Doctrine26 and, as the said doctrine was part of the public policy of India, as also in view of the non-disclosure and suppression of the D&M 2003 Report and the law laid down by the Honble Supreme in Common Cause vs Union of India27 that 100% disgorgement is mandatory when natural resources have been produced without any lawful/ express authority; and thirdly that there was Non-Arbitrability of Disputes as the claims of RIL fell outside the scope of the arbitration agreement, since it fell within the realm of public law and were matters of public policy being covered by the PTD, hence not arbitrable.
22. The said application under Section 34 of the Act came to be dismissed by the learned Single Judge vide the impugned order wherein, he formulated the following issues:-
33.1. Was the arbitration an international commercial arbitration? within the meaning of section 2 (1)(f) of the A&C Act, and consequently whether patent illegality appearing on the face of the award is available as a ground for challenge under section 34 of the A&C Act?;

33.2 Did the arbitration involve a question of public law making the dispute non-arbitrable?;

33.3. Is the award in conflict with the public policy of India, say, for being in contravention with the fundamental policy of Indian law; or in conflict with the most basic notions of morality or justice?;

33.4. Was the transaction between the contesting parties governed by the ‘public trust doctrine’ with its over-arching considerations, that would warrant interference with the arbitral award on the ground that it was in conflict with the public policy of India?;

33.5. Has the arbitral tribunal taken a possible view? and a view which is not perverse. In addressing this last proposition, it would be necessary for the court to look at the factual controversies; the evidence adduced by the contesting parties in support of their respective positions; and also the conclusions arrived at by the arbitral tribunal, without however substituting the court’s own view for the view taken by the arbitral tribunal on points of fact.

23. The learned Single Judge, while dismissing the application under Section 34 of the UOI vide the impugned order, went onto hold that the arbitration inter-se the UOI and RIL was an International Commercial Arbitration and as such, the ground of patent illegality was not available, to interfere with the Arbitral Award; and since there was no disposition of title/ ownership of the natural gas, which always lied with the UOI, RIL had a limited role to explore and extract the natural resources as a licensee. Therefore, as per the learned Single Judge, the PTD was not contravened; and even though RIL was in breach of the PSC by not disclosing the D&M 2003 Report, it was not material; further that RIL divided all profits derived from the production of all-natural gas in the manner provided under the PSC; that the learned AT was correct in coming to the finding that there was indeed existence of PTD, however, RIL had acted in furtherance of such doctrine by extracting petroleum in the most efficient and commercially sensible manner and furthermore that the PSC does not prohibit but permits the extraction of the migrated gas; that the conclusions drawn by the learned AT were such that a reasonable person could reach them and as such, it was certainly a possible view.

Section 37, The Arbitration and Conciliation Act, 1996 proceedings:
Submissions of the Union of India:
24. Aggrieved thereby, the UOI preferred the present appeal under Section 37 of the Act, before us. Mr. R. Venkataramani, learned senior Advocate and the learned Attorney General of India and Mr. K.K. Venugopal, learned senior Advocate and also the ex-learned Attorney General of India along with Mr. Gopal Jain, senior Advocate, all appearing on behalf of the UOI28 have primarily urged that the Arbitral Award is not an International Commercial Arbitration, more so, since the same itself categorically records that we fully accept and recognize that the named claimant in this arbitration is RIL and that Niko is not formally a party to this arbitration , which, because of non-challenge by the RIL is final and binding on it. For the aforesaid proposition, learned Sr. Advocates for the UOI, placed reliance upon Larsen and Toubro Limited Scomi Engineering BHD vs. Mumbai Metropolitan Region Development Authority29. Similarly, learned Senior Advocates also placed reliance upon Perkins Eastman Architects DPC vs. HSCC (India) Limited30, wherein, the Honble Supreme Court has held that if the lead member of an arbitration proceedings is an Indian company, then the arbitration will not be treated as an International Commercial Arbitration. They then went onto urge that if the lead member in an arbitration is an Indian entity, then the arbitration has to be treated as a domestic arbitration.
25. Based thereon, learned Sr. Advocates for the UOI urged that the reliance on West Bengal Ors. vs Associated Contractors31 by the learned Single Judge is misplaced. Moreover, and in view thereof, particularly considering that the Arbitral Award being a domestic arbitration, the test of patent illegality is available under Section 37 of the Act.
26. Learned Sr. Advocates for the UOI also urged that the disputes involved in the arbitration proceedings fell within the scope of public law since, it was admittedly the UOI, who, as per the recommendations of the Shah Committee, raised a Demand Notice dated 03.11.2016 for payment of a sum of about USD 1.5 billion towards the value of the migrated gas from the adjoining ONGC Block, which was never challenged by RIL. Further, since the said Demand Notice was for the value of migrated gas produced and sold by RIL, it fell within the purview of public law and was squarely covered by what has been held by the Honble Supreme Court in Common Cause (supra).
27. Learned Sr. Advocates for the UOI then placing reliance upon RNRL (supra) urged that since the migrated gas is a vital natural resource and vests with UOI as a trustee of the people of the Union in accordance with the PTD, the disputes qua them were not arbitrable. It is their case that the Arbitral Award is in conflict with the public policy of India as migrated gas is a vital natural resource and even UOI and/ or the RIL could not have given/ taken it away without an express contract executed pursuant to a well-defined rational policy. Therefore, the exploration of the migrated gas, a vital natural resource, vested with UOI, and parting with the same without due process would trigger PTD. As such, the Arbitral Award is in violation of the public policy of India.
28. Further, as per learned Sr. Advocates for the UOI, in any event there is no express provision either in the PSC or the 1959 PNG Rules, which authorized RIL to extract and sell the migrated gas from the ONGC Block.
29. Learned Sr. Advocates for the UOI next urged that RIL has been taking inconsistent and changing stands qua the connectivity or continuity of the ONGC Block and the Reliance Block and migrated gas therefrom, from what it took in its affidavit before the learned Single Judge of this Court in W.P. (C) 3054/2014. Therefore, in view of D&M 2003 Report, there was clear evidence of connectivity between the ONGC Block and the Reliance Block, which was duly communicated to RIL, however, it urged to the contrary before the writ Court.
30. Continuing further, learned Sr. Advocates for the UOI urged that RIL, while introducing fresh documents after conclusion of evidentiary hearing at the stage of oral submissions before the learned AT, for the first time contended that DGH and UOI knew or ought to have known about the connectivity between the ONGC Block and the Reliance Block. Even though the said fresh documents filed by the RIL before the learned AT were duly responded by the UOI, yet its response was ignored by the learned AT.
31. Learned Sr. Advocates for the UOI then taking us through the provisions of Article 10 and Article 12 of the PSC urged that though they provide for a plan of action and terms and conditions for such actions in the event of the discovery beyond the Contract Area, however, since the UOI was kept away from knowledge of migration of gas, resultantly the UOI did not take any steps in furtherance thereof.
32. Learned Sr. Advocates for the UOI then drawing our attention to the D&M 2003 Report urged that the same made clear and unequivocal observations that OGIP (gas in place on ONGC Block) would require standalone development from the owner of that block, which could prove cost prohibitive and was a clear indication that both parts of the reservoirs could be efficiently developed together on a commercial basis.
33. Proceeding further, learned Sr. Advocates for the UOI urged that though the learned AT concluded that RIL failed to provide the D&M 2003 Report, however, it went onto observe that the said non-disclosure was not material. This, could not be so since, RIL was in breach of the PSC and the law regarding disclosure is well-settled to the effect that parties to the contract are under a solemn duty to disclose or share any and all information, in so far as it may affect the ability and the authority of the other contracting party to take decisions on the continued working of the contract on the same terms and conditions or to negotiate more acceptable terms and conditions which comes to their knowledge. This was in conflict with most basic notions of justice and morality.
34. Furthermore, it was only during the cross examination of witnesses that suggestions were put to them by RIL that the seismic amplitudes of reservoirs as provided by RIL to DGH could have been examined in depth by the DGH to come to the conclusion that the aforesaid reservoirs could have been connected.
35. Next, learned Sr. Advocates for the UOI also urged that D&M, admittedly, an expert third party appointed by RIL and ONGC, in its the D&M 2015 Report emphatically concluded that both the Reliance Block and the ONGC Block were connected and natural gas had migrated from the ONGC Block to the Reliance Block to the tune of 11.24 x 109 m3.
36. Learned Sr. Advocates for the UOI then drawing our attention to Rule 28 of the 1959 PNG Rules urged that the same also reinforce prohibition requiring any party like RIL herein, to obtain express permission to continue operations if, it appears that a reservoir extends beyond the Contract Area i.e., the Reliance Block boundary. In view thereof, prohibition meant that unless such an order is made, RIL was not permitted to continue petroleum operations beyond its Contract Area. Since the migrated gas belonged exclusively to UOI under the PTD and RIL has no right whatsoever, either to produce the migrated gas, or to appropriate the proceeds of sale thereof, hence, there was unjust enrichment by RIL. Reliance, for this, was placed on what was held by the Honble Supreme Court in Sahakari Khand Udyog Mandal Ltd. vs. Commissioner of Central Excise & Customs32.
37. Learned Sr. Advocates for the UOI lastly urged that the learned AT has not taken a possible view, more so, since RIL failed in its obligations under the PSC to disclose all the interpretive data despite having the technical know-how and expertise. Thus, RIL was guilty of fraud as per Section 17 of the Contract Act, 1872. Even otherwise, UOI could not have known about the continuity of gas reservoirs in the ONGC Block and the Reliance Block by study of seismic data. In any event, it was the duty of RIL to bring it to the notice of the Management Committee about the connectivity thereof.
Submissions of Reliance Industries Limited:
38. Per contra, Mr. Harish Salve, learned senior counsel appearing on behalf of RIL33, amongst various other contentions, primarily urged that the UOI has reversed its case from the value of gas allegedly produced by migration, to the suppression of the D&M 2003/ 2004/ 2005 Report(s). As per learned Sr. Advocate for RIL, the claim of the ONGC on the value of the migrated gas in its capacity as the lessee of the adjoining field, was strongly opposed by DGH before the writ Court in W.P.(C) 3054/2014, so much so, in 2016 DGH took the position that even if, the allegations of connectivity or continuity were taken to be correct, there could not have been joint development for the simple reason that ONGC was not ready and far behind development in the ONGC Block. Furthermore, UOI never alleged there was any suppression and did not base its claim on the breach of Article 26 of the PSC before the Shah Committee.
39. Learned Sr. Advocate for RIL then urged that it was only during the course of oral submission before the learned AT that the DGH for the first time reversed its position to the effect that since PTD applied to the natural resources which were being produced, the necessary inference was that the value of the alleged migrated gas was payable by the contractor/ RIL to the UOI. As such, there was no claim founded on the alleged suppression.
40. It was further submitted that the case of suppression was that, but for the suppression, the UOI would have ordered a joint development, and even in the said event, it would not have resulted in value of the entire gas allegedly produced from the adjacent field being paid over to the UOI but, that ONGC and the RIL would jointly develop the fields, in which ONGC would contribute part of the costs of development, and receive upon sale, reimbursement of its share of costs, and share of petroleum, and the UOI would receive the rest of the profit petroleum. Furthermore, the question of suppression was front and center in the arbitration proceedings, the UOI had known about the likelihood of continuity, as the D&M 2003 Report was only introduced at the end of arbitration proceedings. In any event, the UOI claimed the entire value of the allegedly migrated gas produced from the adjacent field, on the principle of PTD.
41. Learned Sr. Advocate for RIL also urged that before the learned AT the UOI accepted that production of migrated gas by RIL was a question of construction of terms of PSC.
42. Learned Sr. Advocate for RIL further urged that since Rule 28 of the 1959 PNG Rules provided for joint development and allowed UOI to prohibit operations where the petroleum deposits extend beyond the area of the lease, it must follow that absent such a prohibition, there is no inhibition on the petroleum operations within the Contract Area even if, the reservoir extends beyond the boundaries.
43. Learned Sr. Advocate for RIL also urged that since, the PSC provided for petroleum operations within the four corners of the Contract Area and the only limitation was qua all wells being drilled in the Contract Area. It is impossible to say where the gas produced has migrated from, it is quite possible that RIL has produced gas which had migrated from lower levels or from other adjacent areas which had not been detected. The PSC did not require a contractor like RIL to limit production of hydrocarbon only to the extent found in the reservoir in the Contract Area as the same would be incapable of being acted upon and will also cause a waste of natural resources. Even otherwise, Article 12 of the PSC and Rule 28 of the 1959 PNG Rules deals with likelihood of continuity with the possibility of connectivity, for which the UOI has the right, but not an obligation, to direct a joint development.
44. Continuing further, learned Sr. Advocate for RIL, then drawing our attention to the stand of DGH before the Shah Committee that ONGC also had prior knowledge about possible continuity in the channels as far back as 2007, but took no action for several years as also that ONGC acquired and processed 3-D seismic Q-marine data in 2006-2007 in Godavari PML overlapping with the KG-DWN-98/3 block. ONGC made a third party G&G study for appraisal plan for Godavari PML, which it submitted to the DGH in October 2007, and which indicated the continuity of Pliocene channels from ONGCs block to RILs block of KG-DWN-98/3 , urged it was that based thereon the Shah Committee concluded that There appears to be substance in DGHs contention regarding ONGCs prior knowledge .
45. Learned Sr. Advocate for RIL also urged that since ONGC proposed to develop all the discoveries under a single development plan, UOI saved money because of RIL.
46. Learned Sr. Advocate for RIL further urged that reliance upon RNRL (supra) by UOI is misplaced, and the Arbitral Award considers the judgement rightly. In essence it was urged that there is no notion of production of migrated gas as against non-migrated gas, water and gas are fluids and flow from one place to another within a reservoir.
47. Learned Sr. Advocate for RIL thereafter urged that the Notice of Arbitration dated 11.11.2016 stated that RIL, BP Exploration (Alpha) Limited and Niko (NECO) Limited holding Participating interest in Block KG-DWN-98/3 of 60, 30 and 10 percent respectively, and together constitute the Contractor as defined in the PSC. RIL provides this Notice in its capacity as Operator under the PSC for and on behalf of all constituents of the Contractor and RIL did not claim that the consequence of the Arbitral Award is only to relieve RIL of its share of the demand, and accepted that the entire demand becomes irrecoverable on account of the said Arbitral Award. In view thereof the issue of the arbitration being international or domestic did not arrive before the learned AT and did confer jurisdiction upon the learned Single Judge while adjudicating the application of UOI under Section 34 of the Act to observe that the arbitration was an International Commercial Arbitration.
48. It is in view thereof that learned Sr. Advocate for RIL urged that the only causation that survived before the learned AT was, if the PSC did permit the production of migrated gas and the finding of the learned AT that the production of gas from the Contract Area is perfectly lawful and in compliance with the PSC especially, since there was absence of a special order under Rule 28 of the 1959 PNG Rules or Article 28 of the PSC. The same is in accordance with the rights of RIL under Article 8 of the PSC and based on the construction of the contract. As per learned Sr. Advocate for RIL, since there are no independent challenges to the above in the present appeal, the same are binding on the UOI.
49. Learned Sr. Advocate for RIL urges that even if the Arbitral Award is a domestic one, the challenge under Section 34 (2A) of the Act is misconceived as any challenge has to be on matters apparent on the face of the Arbitral Award. For this, reliance was placed Union of India v Bungo Steel Furniture Private Limited34 and Trustees of Port of Madras v Engineering Constructions Corporation Limited35 wherein the same has been narrowly interpreted.
Rejoinder submissions of the Union of India:
50. In rejoinder arguments learned Sr. Advocates for the UOI urged that the ground of fraud played by RIL, since it suppressed the D&M 2003/ 2004/ 2005 Report(s), was specifically pleaded and raised in the Statement of Defense, Opening Statement on behalf of RIL before the learned AT and the said prevented the UOI from exercising its discretion under Article 12 of the PSC. Not only that, there were pleading to the same effect before the learned Single Judge in the application under Section 34 of the Act proceedings as well, yet the Arbitral Award is wholly silent on this aspect as also the aspect of the stand of RIL in the affidavit filed by RIL in W.P. (C) 3054/2014, wherein it specifically pleaded that it had no knowledge of connectivity or continuity. The said suppression, as per learned Sr. Advocates for the UOI is also punishable under Rule 32A of the 1959 PNG Rules, making it patently illegal/ perverse on the face of the Arbitral Award which shocks ones conscience and is in conflict with the most basic notions of justice and morality.
51. After that, learned Sr. Advocates for the UOI urged that the learned AT was wrong in holding that the UOI knew about the connectivity of the Reliance Block and the ONGC Block since 2002, as it is not the case of RIL that the UOI colluded with RIL for production of migrated gas.
52. Thereafter, adverting to the stand of the DGH in the year 2014 in W.P.(C) 3054/2015, learned Sr. Advocates for the UOI urged that the same was so, since the UOI/ DGH was unaware of the connectivity inter-se the two Blocks or the D&M 2003 Report thence.
53. Learned Sr. Advocates for the UOI then placing reliance upon RNRL vs RIL (supra) urged that there is no provision under the PSC, which explicitly permits the extraction of migrated gas. Even otherwise, RIL never produced anything to establish that it had been permitted to extract the migrated gas from the neighboring ONGC Block before the learned AT or the learned Single Judge.
54. Learned Sr. Advocates for the UOI placing reliance upon Ssangyong Engg. & Construction Co. Ltd. v. NHAI36; RNRL v. RIL (supra) further urged that even if, the arbitration proceedings were to be held to be an International Commercial Arbitration, however, since the Arbitral Award is against and in conflict with the public policy of India, most basic notions of morality and justice, it is liable to be set aside.
55. Then, placing reliance upon DMRC Ltd. v. Delhi Airport Authority Metro Express (P) Ltd.37, learned Sr. Advocates for the UOI urged that the jurisdiction under Section 37 of the Act is akin to the jurisdiction under Section 34 of the Act and thus, the same grounds of challenge under the Section 34 of the Act are available under Section 37 of the Act as well.
55.1. Learned Sr. Advocates for the UOI lastly urged that the present is not a case where the plausible view theory will be attracted since the only question for consideration was, by reason of frustration of the PTD as a public policy of India can be endorsed by balancing, on one hand, the set of factors constituting the conduct of parties, relating to suppression of information and knowledge by the RIL, and the possible difficulties in relation to joint development etc. and, on the other hand as has been done by the learned AT which have been upheld by the learned Single Judge.

Analysis and Reasoning:
56. We have heard Mr. R. Venkataramani, learned senior Advocate and the Attorney General of India and Mr. K.K. Venugopal, learned senior Advocate and the ex-learned Attorney General of India along with Mr. Gopal Jain, senior Advocate, all appearing on behalf of the UOI as also Mr. Harish Salve, senior Advocate appearing for RIL as also the lawyers assisting them and have also gone through the relevant documents on record as also the numerous Note of Arguments handed over by both the UOI and RIL from time to time along with the relevant judgements cited by each of them during the course of their arguments.
57. During the course of their arguments, though the learned Sr. Advocates for the UOI have urged various grounds as also supplemented them with various arguments alongwith numerous documents forming part of the arbitration proceedings, and the learned Sr. Advocate for RIL has also, in response thereto, befittingly countered them during the course of his arguments as well, however, since we are mindful that we are dealing with the present appeal under Section 37 of the Act, before deliberating into the issues at hand, we deem it appropriate to deal with the scope, intent and application of such an appeal under Section 37 of the Act.
Scope, intent and application of Section 37, The Arbitration and Conciliation Act, 1996:

58. Section 37 of the Act is a provision relating to appealable orders under Chapter 9: Appeals, which reads as under:
37. Appealable orders.-(1) Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:-s
(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section 34.
(2) Appeal shall also lie to a court from an order of the arbitral tribunal
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or takeaway any right to appeal to the Supreme Court.
59. Therefore, what entails is that an appeal under Section 37 of the Act lies only against the order(s) refusing to refer the parties to arbitration under Section 8 of the Act; granting or refusing to grant any measure under Section 9 of the Act; setting aside or refusing to set aside an arbitral award under Section 34 of the Act. Further, an appeal shall also lie to a court from an order of the arbitral tribunal which has accepted the plea referred to in Section 16(2) or Section 16(3) of the Act or which has granted or refused to grant an interim measure under Section 17 of the Act.
60. We, like any Court dealing with an appeal under Section 37 of the Act, are not to sit over in appeal over the award passed by the arbitrator/s. Meaning thereby, we have to be mindful of the fact that we are not discharging the functions of an appellate Court like a Civil Court. Therefore, we, like any Court dealing with an appeal under Section 37 of the Act are to operate within the limited ambit as provided by the Act. In fact, the Honble Supreme Court from time to time, while dealing with the said Section 37 of the Act and the contours thereof, has expressly laid down the framework and the parameters to be followed by any Court while dealing with such an appeal under Section 37 of the Act.
61. The provisions under Section 37 of the Act are akin to that under Section 34 of the Act and we, like any other Court like us, while adjudicating an application under Section 37 of the Act have to apply the same analogy and principles applicable to Section 34 of the Act.
62. As observed hereinabove, since the provisions of Section 34 of the Act also play a relevant part while we are dealing with and deciding an appeal under Section 37 of the Act, the same is reproduced hereinbelow:-
34. Application for setting aside arbitral award.-(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if
(a) the party making the application establishes on the basis of the record of the arbitral tribunal that
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected itor, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1.For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.

63. We, begin by reproducing hereinbelow the decision in Delhi Metro Rail Corporation v. Delhi Airport Metro Express Pvt. Ltd.38, wherein the Honble Supreme Court has recently held as under:-
40. A judgment setting aside or refusing to set aside an arbitral award under Section 34 is appealable in the exercise of the jurisdiction of the court under Section 37 of the Arbitration Act. It has been clarified by this Court, in a line of precedent, that the jurisdiction under Section 37 of the Arbitration Act is akin to the jurisdiction of the Court under Section 34 and restricted to the same grounds of challenge as Section 34.
41. In the statutory scheme of the Arbitration Act, a recourse to Section 37 is the only appellate remedy available against a decision under Section 34.
(Emphasis Supplied)

64. Similarly, the Honble Supreme Court in Punjab State Civil Supplies Corporation Limited & Anr. v. Sanman Rice Mills & Ors.39 has also recently held as under:-
11. Section 37 of the Act provides for a forum of appeal inter-alia against the order setting aside or refusing to set aside an arbitral award under Section 34 of the Act. The scope of appeal is naturally akin to and limited to the grounds enumerated under Section 34 of the Act.
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14. It is equally well settled that the appellate power under Section 37 of the Act is not akin to the normal appellate jurisdiction vested in the civil courts for the reason that the scope of interference of the courts with arbitral proceedings or award is very limited, confined to the ambit of Section 34 of the Act only and even that power cannot be exercised in a casual and a cavalier manner.
xxxx
16. It is seen that the scope of interference in an appeal under Section 37 of the Act is restricted and subject to the same grounds on which an award can be challenged under Section 34 of the Act. In other words, the powers under Section 37 vested in the court of appeal are not beyond the scope of interference provided under Section 34 of the Act.
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20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court.
21. It must also be remembered that proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit. Therefore, the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement.
(Emphasis Supplied)

65. Prior thereto also, the Honble Supreme Court in MMTC Ltd. v. Vedanta Ltd.40, held as under:
14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34, and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.
(Emphasis Supplied)

66. Therefore, it is clear from the above that though we are not to reappreciate and re-examine the evidence led by any of the parties before the learned AT nor any of the documents produced by any of them before the learned AT, unless the Court exercising power under Section 34 of the Act has failed to exercise jurisdiction vested in it by the said Section 34 of the Act or has travelled beyond its jurisdiction. It is only under such a scenario that we, under Section 37 of the Act, can step in and set aside the order passed by the learned Single Judge exercising our power under Section 37 of the Act. Therefore, there has to be something egregious and/ or scathingly shocking which has either escaped the mind or has been overlooked by the learned Single Judge, and if that be the position, we have no alternative but, to interfere with the Arbitral Award passed by the learned AT.
67. Therefore, the Arbitral Award passed by the learned AT is not liable to be interfered with unless a case for interference as set out hereinabove is expressly made out, furthermore, unless it is contrary to the substantive provision of law or contrary to any provision of the Act or contrary to the terms of the Contract/ Agreement. Not to forget that the proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit. As such, even the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. In view thereof, it is only under such circumstances that we, while dealing with an appeal under Section 37 of the Act, are required to step in to prevent any serious miscarriage of justice by taking corrective measures and set the wrong right.
68. Now keeping in mind what is borne out from the extensive deliberations hereinabove, we are to ascertain if the UOI has been able to make out a case before us which merits interference by us in the present proceedings under Section 37 of the Act, especially, since it is arising out of an appeal from an order passed by the learned Single Judge under Section 34 of the Act. More specially, we are to examine as to whether the Arbitral Award goes against the public policy of India, the Public Trust Doctrine or whether the fundamentals of contract law have been vitiated, or any other such factor(s) as would fall within the realm of fundamental policies of any laws of India, along with basic notions of morality and justice.
69. In terms of the above, this largely brings us to a level where we, like any other Court while dealing with an appeal under Section 37 of the Act, will be required to adjudicate if the learned Arbitral Tribunal and/ or the learned Single Judge was/ were legally and/ or factually sound in arriving at their opinions so formulated in the Arbitral Award and the Impugned Judgement, respectively.
70. Considering the factual matrix involved and what has unfolded before us at the time of arguments addressed by the learned Sr. Advocates appearing for both the UOI and RIL, we feel, it appropriate to restrict ourselves to the below mentioned two material questions:-
Q1. Whether the present arbitration proceeding inter-se UOI and RIL was an International Commercial Arbitration? and;

Q2: Whether the learned Single Judge erred in not examining the Arbitral Award passed by the learned AT under Section 34 (2A) of the Act, leaving us to adjudicate any involvement of patent illegality in the said Arbitral Award?

International Commercial Arbitration:
71. Let us begin by analyzing the first of the material issues, i.e. whether the arbitration proceedings inter-se the UOI and RIL was an International Commercial Arbitration or not. For this, it would be prudent on our part to commence by tracing back our steps to the observations made by the learned AT in the Arbitral Award, which are reproduced as under:-
192. There is no dispute that the Claimant is required under the Contract to lead the Contractor party under the PSC. Its interest and those of BP and Niko were aligned vis-a-vis the Respondent and they had consistently so acted. However not being a party to the arbitration should the costs incurred by each of them be included as those incurred by the Claimant and recoverable from the Respondent? In the Tribunal’s view, this should not be. The scheme of the PSC is such that the Claimant as operator is the only party in the PSC entitled to deal with the Respondent. Neither BP nor Niko had sought to join the arb