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The delay of the Government of India in setting prices for natural gas has prompted the contractor group of the D6 block to serve a notice of arbitration over the issue. Commentators see the move as symptomatic of a need for greater transparency in governmental decision making.
RIL, BP, and Niko Resources (a Canadian company) issued a notice of arbitration to the Government of India because of a delay on the part of the government to set gas prices in accordance with the formula approved under the governing contract. The corporations have stated that the continuing failure to set the prices has damaged their balance sheets, and has not been conducive to further exploration. The author opines that this particular notice of arbitration is an illustration of a larger need for the Government of India to improve corporate governance and implement measures which enhance the transparency of decision making by authorities.
Read the article here.Take away:
- The need to serve a notice of arbitration on the Government of India may indicate transparency issues in the Indian economy.