UPDATED PRESS RELEASE: 

 Attorney General Not “Bypassed” Or “Avoided”

Our attention has been drawn to a report which has appeared in a National Daily today, titled “Vahanvati son’s role in Vedanta makes Centre bypass AG”. The Ministry of Law and Justice takes exception to this report which is inaccurate and false. The Ministry would like to clarify that there was no question of “avoiding” or “bypassing” the Attorney General. No proposal has been received by the Ministry from the Ministry of Petroleum in relation to the Vedanta-Cairn matter. Accordingly, the question of any such proposal being sent directly to the Solicitor General does not arise. Further, no complaints have been received by this Ministry in relation to any alleged possible clash of interest as far as the Attorney General is concerned. The Attorney General’s son is an independent professional practicing law as a Partner of AZB & Partners. This report is unfair, contrary to facts on record and has created unnecessary controversy.

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October 18, 2010

In an interesting development, the Law Ministry has had to bypass the Attorney General, G.E. Vahanvati and seek out the Solicitor General’s legal opinion in the Vedanta-Cairn matter due to his son, Essaji Vahanvati acting as one of the legal advisors to Vedanta.

Normally, the Attorney General is the primary advisor on any legal issues concerning the Government of India. Essaji Vahanvati who is a junior partner with AZB & Partner’s Mumbai office was one of the named Partners who worked on the Vedanta - Cairn deal.

The Pioneer, which contacted the Attoney General quotes as follows: [the] Attorney General first tried to downplay the Government’s decision on sending the files to the Solicitor General, who normally advises the Government on the matters in courts. “No, I have not made any recusal. They did not send the file to me. I am not handling it”.

To the specific questions on his son’s role in the deal, Vahanvati explained, “My son is a junior partner in that law firm. I have nothing to do with that as he is an independent lawyer. I have not recused. But if the Government had sent the file (to me), I would not take it.”

The deal, which was announced in August of this year, saw the Vedanta group announcing its intention to acquire up to 60 percent of Cairn India Limited for $9.6 billion (Rs. 44,160 crore). Since the announcement thought, hurdles and controversies have been persistently following the transaction. Latham, AZB, S & R and Shepherd and Wedderburn had advised this high profile deal where Vedanta was to acquire a majority interest in Cairn Energy.

First came the objection from the Petroleum Ministry who claimed that the Government through the state owned Oil and Natural Gas Company (ONGC) have first rights on Cairn’s oil blocks in India. Then came the news that Cairns will have to take separate approval from the Government for each of its assets that it shares with them. Add to this, the Environmental Ministry’s refusal to allow Vedanta mining rights in Orissa.

Incidentally, the AG had argued on behalf of the Environmental Ministry in 2007 when he was the Solicitor General arguing against the grant of environmental approval to the group regarding mining operation in Niyamgiri Hills and again gave his legal opinion to the Ministry, which led Environmental Minister, Jairam Ramesh banning the company from carrying out mining in the area. 

Last year, Justice Raveendran recused himself to hear the high profile dispute of the Reliance brothers when his daughter Sunita Rajesh worked as Partner at the Bangalore office of AZB & Partners.