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Arbitrator Seeks No-Objection from Oil Ministry before Proceedings Begin

Saturday, January, 17, 2015

Former Australian judge Michael Kirby has expressed willingness to act as lead arbitrator in a cost recovery dispute in the Indian oil field designated KG-D6.  However, because Kirby’s father once was associated with British Petroleum (BP), which had a stake in the KG-D6 field, he has stated he can only accept the position if the Oil Ministry grants him an official ‘No-Objection.’ The Oil Ministry has so far failed to do so, and so Kirby has stated he cannot in good conscience accept the post despite being appointed by the Indian Supreme Court.


The two oil companies that Kirby’s late father was involved with, BP and Reliance Industries, have both already granted Kirby their own No-Objections for him to act as lead arbitrator in a dispute over whether the Indian government was within its rights to disallow $2.3 billion in charge-downs in the underperforming KG-D6 field.


Kirby is the second choice for lead arbitrator; a previous arbitrator initially refused the appointment, than accepted, but withdrew when the government expressed dissatisfaction with his initial refusal.


The arbitration has been in process since 2011, delayed again and again by procedural disputes.  The huge amount of money involved and the delicate negotiations always involved with oil fields have combined to delay the resolution of the matter again and again.  There has been no word on whether the government will object to Kirby’s appointment due to his initial reluctance to participate or whether they will accept his reasoning over the lack of a No-Objection from the ministry.