From tribunal to apex court: The never-ending dispute in India's contracting system

DELHI, India - Sept. 15, 2025 - PRLog -- What began as unpaid invoices in 1998 has finally culminated at the Supreme Court in 2025. The case of ONGC versus G&T Beckfield Drilling Services underscores a harsh reality: arbitration in India, once touted as a speedy alternative to litigation, has become little more than a pre-trial ritual in an endless judicial process.

In 2004, an arbitral tribunal awarded G&T Beckfield approximately USD 656,000 plus 12% annual interest against ONGC, along with Rs. 5 lakh in costs. That should have closed the matter. Instead, the dispute ricocheted through every judicial tier:

• 2007: A District Judge set aside the award.
• 2019: The Gauhati High Court reinstated it.
• 2025: The Supreme Court has upheld the award, dismissing ONGC's last attempt.

This timeline means a 1998 invoice has taken nearly three decades to reach final enforcement—an extraordinary delay for what was supposed to be an "alternative" dispute forum.

At the heart of the case was ONGC's reliance on Clause 18.1 of its contract, which barred payment of interest on delayed or disputed claims. The Supreme Court clarified that the clause prevented interest only while disputes were pending. Once a tribunal determined that amounts were unjustifiably withheld, pendente lite interest was permissible. As a result, ONGC is now liable for almost 30 years of accumulated dues and interest.

Implications for India's Contracting Environment

The ONGC–Beckfield saga reflects systemic issues:

• Arbitration is no closure – winning an award does not translate into quick relief.
• Public sector litigation strategy – PSUs predictably appeal, dragging contractors through every legal tier.
• Cash flow risks – contractors face prolonged uncertainty, often spanning decades.

"Arbitration in India has ceased to provide finality," said the IndianPetroPlus Editorial Team. "Instead of serving as a swift resolution mechanism, it merely signals the beginning of a protracted court battle."

The case demonstrates that every arbitral victory is provisional until validated by the apex court. For businesses engaging with Indian PSUs, arbitration clauses provide little comfort—merely a starting line for litigation, not its end.

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Media Contact:
Editorial Team – IndianPetroPlus
Email: editorial@indianpetroplus.com
Website: www.indianpetroplus.com