ASSAM COMPANY INDIA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The Petitioner Assam Company India Limited ('ACIL') has filed this petition under Section 9 of the Arbitration and Conciliation Act, 1996 ('Act') seeking to restrain the Respondent Union of India [hereafter referred to for uniformity as Government of India(GOI)] through Ministry of Petroleum and Natural Gas ('MoPNG') from taking a final decision on the bids received by it pursuant to the International Competitive Bidding ('ICB') under a bid document for complete surface and subsurface assets valuation of the Amguri field. A further order is sought to restrain the MoPNG from taking any decision to auction the 60% Participating Interest ('PI') in the Amguri field and allowing to induct any third party to the existing Production Sharing Contract ('PSC') or from creating any third party rights in respect of the 60% PI of Canoro Resources Limited ('CRL') which has been assigned to ACIL. A third relief sought is to permit ACIL to operate the Amguri field (including operating production from the wells, maintain and undertake such activities to ensure that the field is operational) on such terms and conditions as the Court may determine.

(2.) In 1993, the Respondent GOI invited bids under the ICB for the development of various medium and small sized oil and gas fields in India, including in the State of Assam. The Notice Inviting Offers clearly stated that since the fields were small sized, public sector oil companies like Oil and Natural Gas Commission ('ONGC') or Oil India Limited ('OIL') would not acquire any PI nor participate in the development of these small sized fields which were to be reserved for private/joint venture companies. ACIL earlier known as Assam Company Limited along with Joshi Technologies International Inc. ('JTI'), USA submitted a bid as a consortium for the Amguri field in Assam. ACIL's consortium bid was accepted and on 23 rd February 2001, a PSC was entered into between the UoI, ACIL and JTI for the development of hydrocarbon resources in the Amguri field and the PI of ACIL and JTI was specified as 75% and 25% respectively. Under the PSC, the JTI was specified as the Operator for carrying out petroleum operations. It was to provide to the UoI a copy of the duly executed Operating Agreement ('OA') within thirty days of the effective date. The agreement provided for production sharing of petroleum. ACIL as well as JTI were collectively referred as the Contractor. Article 15 provided for the rights in relation to cost petroleum recovery and Article 16 in relation to production sharing of petroleum. The clauses relating to assignment of interest were specified in Article 29 of the PSC. The relevant clauses of the said Article read as under:

(3.) Article 31 dealt with termination of the contract and read as under:-