Financial Times

FR petition against oil exploration bid in court tomorrow
By Bandula Sirimanna

The resumed hearing in the Fundamental Rights petition filed before the Supreme Court seeking to review the awarding of the oil exploration bid to Cairn India is to be taken up tomorrow. The petition was filed in June by Malika Gunasekera, a lawyer, as a public interest litigation case.

He says the awarding of the oil exploration contract to Cairn India was not transparent. Earlier when the case came up in late June, a 3-judge bench of the Supreme Court headed by Chief Justice Sarath N. Silva concluded that the petitioners should be allowed to inspect the documents pertaining to the transactions of the oil exploration agreement with the Indian company. Milinda Gunathilake senior state counsel appearing on behalf of the Attorney General submitted that the decision on this matter was taken by the cabinet of Ministers according to law on the basis of the report of the Cabinet Approved Negotiating Committee (CANC). Counsel for the petitioner subsequently inspected the documents on 09-07-2008 and filed a motion to open up the case after examining the documents.

On July 7, an agreement was signed by Petroleum and Petroleum Resources Minister A.H.M. Fowzie for Sri Lanka and Indrajit Benerijee, the Chief Financial Officer of Cairn India offering Cairn one of the blocks. However documents filed in court show that the agreement had been signed with a newly formed company in Sri Lanka, Cairn Lanka (Pvt) Ltd who was not a party to the bid and had not been evaluated
In the meantime, Niko Resources Ltd Canada (17th respondent in the petition) last Wednesday filed objections and an affidavit disputing the correctness of the CANC report. They had stated that even though they had made offers for 3 blocks, they had not been called for negotiations in accordance with international practice. It has also been revealed that Cairn Lanka (Pvt) Ltd has one shareholder called CIG Mauritius, and not Cairn India.

Therefore this respondent urged the court to make an order declaring that their fundamental rights to equal treatment has been violated and to cancel and make void the agreement signed by the Sri Lankan government and Cairn Lanka (Pvt) Ltd.

Three companies, Cairn India Ltd, ONGC Videsh Ltd and Niko Resources (Cyprus) Ltd had submitted six bids for oil exploration, of which Cairn India had been selected to carry out exploration activities in the Mannar Basin. Meanwhile the Board of Investment (BOI) and Cairn Lanka (Private) Ltd, a wholly owned subsidiary of Cairn India, on Thursday signed an agreement for a commitment of an initial investment of more than US$110 million towards the exploration of hydrocarbons.

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