Supreme Court Refers $1.55 Billion Krishna-Godavari Basin Gas Dispute to Mediation; Former Judge Ranjana Prakash Desai Appointed Mediator
The Supreme Court has referred the long-running Krishna-Godavari (KG) Basin gas migration dispute between the Government of India and Reliance Industries Limited (RIL) to mediation, marking a significant development in one of India’s major natural gas and corporate legal disputes.
On October 30, 2026, the Supreme Court appointed former Supreme Court judge Justice Ranjana Prakash Desai as the sole mediator to facilitate a possible settlement between the government and the Reliance-led consortium.
The dispute involves allegations that natural gas belonging to the state-owned Oil and Natural Gas Corporation (ONGC) migrated from its adjoining gas fields into Reliance Industries’ KG-D6 block, where it was subsequently extracted and commercially produced between 2009 and 2013.
ONGC alleged that the underground gas reservoirs in the neighbouring blocks were interconnected and that Reliance benefited from extracting gas that originally belonged to ONGC’s fields. The government subsequently sought approximately $1.55 billion in compensation, along with additional interest.
Reliance Industries, along with its international partners BP Exploration and Niko Resources, disputed the government’s allegations. The consortium maintained that the gas had naturally migrated between interconnected underground reservoirs and that its extraction was permissible under the applicable contractual arrangements.
The dispute initially went to international arbitration. In July 2018, the arbitration tribunal ruled in favour of Reliance and its partners, rejecting the government’s monetary claim.
However, the legal position changed when a Division Bench of the Delhi High Court overturned the arbitration award in February 2025. The court found serious legal flaws in the award and questioned the interpretation of the government’s rights over natural resources.
The Reliance-led consortium subsequently challenged the Delhi High Court decision before the Supreme Court, bringing the dispute into another significant phase of litigation.
During the Supreme Court proceedings in May 2026, the government strongly contested Reliance’s position, while the consortium defended its contractual rights and sought an amicable resolution.
After several attempts to explore a negotiated settlement failed to produce a viable outcome, both sides agreed to pursue formal mediation.
The Supreme Court has requested Justice Ranjana Prakash Desai to take assistance from two domain experts whose names will be suggested by the parties. Their technical expertise is expected to help address the complex geological, contractual and commercial questions surrounding the dispute.
The mediation could provide an opportunity to resolve the prolonged dispute without further extended litigation. However, the appointment of a mediator does not mean that either side has admitted liability or that a final settlement has been reached.
The case has broader implications for India’s petroleum and natural gas sector, particularly regarding ownership of underground hydrocarbon resources, production-sharing contracts, government oversight and the responsibilities of private energy companies.
The next stage will depend on the outcome of mediation and whether the government and the Reliance-led consortium can reach a mutually acceptable settlement over the disputed gas extraction and financial claims.
