'You Have Lot Of Money But Can't Pay Arbitrators?You Are Insulting Judges' : Supreme Court Raps ONGC; Seeks AG's Intervention

The Supreme Court of India on Wednesday came down heavily on the Oil and Natural Gas Corporation(ONGC) for refusing to pay fee to arbitrators as decided by the Tribunal, resulting in the recusal of three former High Court Judges appointed as Arbitrators.

A Bench comprising Chief Justice of India NV Ramana, Justice AS Bopanna and Justice Hima Kohli remarked that ONGC, being a public sector undertaking, has enough money to file "frivolous proceedings" but not enough to pay the arbitrators.

"What is this attitude of ONGC? I'm issuing a notice. I think I've to issue a contempt notice also. The other day such a frivolous matter was filed. Everyday we are watching. We are watching this ONGC. Public sector undertakings because you have lot of money, you keep filing frivolous proceedings. And you don't want to pay fee to arbitrators", CJI remarked.

The Bench has requested the Attorney General KK Venugopal to intervene in the matter and listed it for hearing after one week.

"Talk to them, solve the problem. It's a very embarrassing situation. No retired judge would come and appear as arbitrators", CJI told AG.

"I'll talk to them, they'll agree to the fee. Fee must be left to arbitrators", AG said.

The remarks were made in response to a letter written by one of the Judges appointed as an arbitrator seeking to recuse from the matter.

When the matter was called for hearing today, the Bench called out ONGC for "insulting the Judges" who have been appointed as Arbitrators by the Supreme Court, and also asked the Attorney General to appear before it in the matter.

"What do you think of yourselves? I'm issuing a suo moto contempt. You're insulting the judges? Because you have lot of money? Call the Attorney General to appear" CJI told ONGC's Counsel.

After Attorney General KK Venugopal appeared before the Court virtually, the Bench stated that they have asked the AG to appear only to bring 'the attitude and arrogance of ONGC' to his notice as he is the Attorney General of India.

" Why we called you is, this ONGC is a party. There's an arbitration, this Court appointed three Judges. We want to bring to your notice as you are Attorney General of India, arrogance of ONGC, the behaviour and conduct of ONGC. I think they have lot of money its a public sector undertaking so they think they can talk anything and they can do anything." CJI remarked.

The Chief Justice of India then read out the letter written by Justice S.C. Dhamadhikari, former judge of the Bombay High Court, seeking to recuse as arbitrator.

The letter pointed out that after Supreme Court's order, the Tribunal decided the schedule for proceeding along with the fee structure in terms of the Supreme Court order.

According to the letter, the Advocate appearing for ONGC had them sought time to inform the Tribunal if ONGC was willing to accept the Tribunal's determination of fee, and sought to share the burden equally with the claimant. The Advocate later informed the Tribunal that the ONGC was not agreeable to any fee schedule other than determined under clause of the contract.

The letter stated that one of the arbitrators stating his previous experience with this entity sought to recuse himself. The Claimant's advocate tried to persuade the ONGC but they reiterated their earlier stand that the fee should be decided according to their contract between the claimant and the respondent.

After the two arbitrators recused, Justice Dhamadhikari in his letter stated that "I find it embarrassing to continue as member of Tribunal" and the Claimant can't alone be asked to pay fee decided by the Tribunal.

The present Arbitration petition where ONGC was a respondent was disposed of by appointing Justice Jai Narayan Patel, former Chief Justice of Calcutta High Court and Justice S.J. Vazifadar, Former Chief Justice of Punjab & Haryana High Court as the Arbitrators. Thereafter, Justice S.C. Dhamadhikari, Retired Judge, High Court of Bombay has been appointed as one of the Arbitrators through order dated 01.07.2021 in as Justice S.J. Vazifadar, recused himself from the matter.

The present letter dated 29.10.2021 was received from the Justice, S.C. Dhamadhikari stating therein that he had to recuse himself as an Arbitrator.

Case : M/s Schlumberger Asia Services Lts vs ONGC, MA 1825/2021 in Arbit Case 22/2020

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