Court can`t impose family pact on shareholders: RIL

Last Updated: Tuesday, November 17, 2009 - 16:09

New Delhi: Mukesh Ambani-led Reliance Industries Ltd (RIL) Tuesday argued before the Supreme Court that the judiciary cannot impose a private family pact between a company`s promoters on its shareholders.

"The court has to act as an umpire rather than as a bowler or as a fielder," Rohington Nariman, counsel for RIL, told a three-member bench of the apex court that is hearing the Krishna-Godavari gas dispute.
"The court only has a supervisory role," Nariman told the bench comprising Chief Justice KG Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam that is adjudicating the dispute between RIL and Reliance Natural Resources Ltd (RNRL).

Questioning the maintainability of the position taken by the Anil Ambani-led company, the RIL counsel also contended that RNRL could not seek judicial relief in corporate affairs on the basis of a family agreement.

Nariman is expected to finish his argument in the post-lunch session after which the government counsel, Additional Solicitor General Mohan Parasaran is to start his argument.

The dispute is over the supply of 28 million units of natural gas for 17 years at USD 2.34 per unit to RNRL from the gas fields off the Andhra Pradesh coast, awarded to Mukesh Ambani-led RIL.
The price, tenure and quantity were all based on a family re-organisation pact in 2005, but RIL subsequently said it could only sell the gas for USD 4.20 per unit, as this was the price, the company claimed, that was fixed by the government.

IANS



First Published: Tuesday, November 17, 2009 - 16:09

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