Financial Times

Supreme Court rejects FR petition against oil exploration bid

The Supreme Court on Monday rejected the Fundamental Rights petition filed before it seeking to review the awarding of the oil exploration bid to Cairn India.

The petition was filed in June by Malika Gunasekera, a lawyer, as a public interest litigation case. In his FR petition he stated that bids were called for three blocks in the Mannar basin, but only one block was awarded without evaluating offers for all three blocks. The awarding of one block to only one party would prevent attracting other parties to explore other blocks, and also a monopoly could be acquired by one party, he said. He also brought to the notice of the court that as per Sections 5 and 6 of the Petroleum Resources Act No.26 of 2003, the Petroleum Resources Development Committee as constituted by this act could only receive and evaluate bids.

A 3-judge bench of the Supreme Court headed by Chief Justice Sarath N. Silva agreeing to submissions made by senior state counsel noted that the awarding of the oil exploration contract to Cairn India was concluded in a transparent manner. The Court held that there was no sufficient ground to prove wrongful alienation of an invaluable natural resource for the benefit of a surreptitiously selected party, in violation of established and mandatory tender procedures / procurement guide lines of the government.

Rejecting the FR petition the Chief Justice said that the court will not stop the oil exploration and sare off investors. Citing an example he said that by halting the Eppawala phosphate project the country has lost a golden opportunity of producing fertilizer to meet the needs of agriculture. Agreeing to submissions made by the counsel who appeared on behalf Cairn India, the Supreme Court concluded that Cairn Lanka (Pvt) Ltd had been incorporated in the island with 100 % ownership of Cairn India and CIG Mauritius was also owned by the same company.

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