ONGC wins year-old legal battle

IN ITS best effort, you can say that Oil and Natural Gas Commission (ONGC) of India has won the legal battle against the Perth-based Clough Engineering in the Federal Court of Australia that has also helped ONGC to receive $21.5 million or Rs 100 crore as the victory fruit. ONGC filed the case against Clough Engineering, a Perth based engineering firm for showing lack of performance as well as indifferent attitude in the overall development of intense sea blocks in the Krishna - Godavari basin off the Andhra Pradesh coast. While that particular firm had already provided assurance to encash the performance guarantee, in realty, the progress was found nil. While making the contract, this Perth-based firm had agreed to resolve any kind of difference with the Indian PSU through arbitration as per the laws mentioned in the Indian Constitution and also under the exclusive jurisdiction of courts in India. In 2005, ONGC challenged its performance and consequently fired out the firm from the contract, which led Clough to move the entire case to the Federal Court in Australia as they stated that there was a breach of its earlier commitment and also brought an injunction notice against the PSU. The recent judgement, declared by the Australian Federal Court also points a complete end to a year-long legal war-fare between Clough and ONGC too. It also brought a fruitful solution of the ongoing dispute over ONGC’s unfinished $215 million contract, that was ultimately aimed for the overall development of G1 (deep sea) and GS15 field in the K-G basin. ONGC’s law – officials fought bravely before the Australian Federal Court that the Indian public sector undertaking (PSU) was not at all responsible to encash the bank guarantee and that it would not be illegal to invoke the jurisdiction of the Australian courts under the Trade Practices Act of Australia, as Clough had claimed. During the proceedings, the Australian Federal Court decided as well as declared that ONGC did not engage in unconscionable conduct by invoking the performance guarantee and accused Clough as the prime villain who violated the contract agreement, that clearly spoke about the extensions of guarantees and insurance policies. As compensation, now Clough Engineering had to pay all genres of litigational cost to ONGC. Obviously, it is a great victory to ONGC in abroad. At the same time, it is a national victory too. By Ms.Bobby Aanand, Metropolitan Jury

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