New Delhi: Anil Ambani led RNRL on Tuesday asserted in the Supreme Court that family MoU of 2005 was a "sacrosanct" document for resolving the gas row with Mukesh Ambani group RIL and accused it of scuttling efforts to arrive at a bankable agreement for the supply of gas from KG Basin.
The arguments in the high-voltage bitter legal battle for the first time saw Anil Ambani sitting during the court proceedings throughout the day.
Besides MoU, the RNRL said it wants to strictly comply
with the NTPC document which envisaged the supply of gas to the
PSU at USD 2.34 per mmBtu by the RIL.
"We want to strictly comply with the MoU. We want to
strictly comply by the NTPC document. MoU is sacrosanct and we
have no dispute at all on it and the NTPC draft is a model
document," senior advocate for RNRL, Ram Jethmalani submitted
before a Bench headed by Chief Justice K G Balakrishnan.
He said under the MoU, mother Kokilaben Ambani has the
power to give directions for working out the MoU which was
practically to be given the shape of the scheme for demerger.
"The MoU was to be given a shape for technically
feasible and commercially viable gas supply production
agreement (GSPA) which has to confirm to the NTPC document.
Our purpose was that the GSPA consider the NTPC draft which
is the best," Jethmalani said while countering RIL's argument
that the family MoU was not binding for arriving at suitable
arrangement for the supply of gas.
"How can they say MoU is not binding," Jethmalani said
before the Bench, also comprising Justices B Sudershan Reddy
and P Sathasivam and alleged that till the negotiations were
going on for arriving at the bankable contract, RIL never
raised the issues of Production Sharing Agreement or the
approval of price for the supply of gas by the government.
"The other side (RIL) later came out with bogus
arguments of PSA and price approval by the government," he
said adding that there was no dispute on the price, duration
and quantum of gas to be supplied.
"Throughout the negotiations there was no reference of
PSA or government approval relating to price between the two
companies. Time and again they (RIL) said they are trying to
evolve bankable arrangement," Jethmalani said.
The Ambani brothers are engaged in a court battle over
the supply and price of the gas from KG basin.
While RNRL is seeking gas at a committed price of USD
2.34 per unit, RIL says it cannot honour the commitment made
in the family agreement due to government's pricing and gas
policy.
Jethmalani blamed the RIL for creating roadblocks for
the RNRL's Rs 22,000 crore proposed power plant in Dadri in
Ghaziabad district of Uttar Pradesh for which the gas was to
be supplied from the KG Basin.
"The Directors (of RNRL) required Rs 22,000 crore to
raise the proposed project. We needed the bankable agreement
or contract which was to be according to the international
trading practice," he said.
RNRL asserted that NTPC draft on supply of gas at the
rate of USD 2.34 per mmBtu was supposed to be the "template"
and both the groups during the negotiations knew what is there
in the MoU.
"Throughout this negotiation from June 30 upto the
time of filing of the scheme (in the court on September 16,
2005) and thereafter, there was no dispute about the price
whether it has to be approved by the government," Jethmalani
said adding, "it still remains mystery as to how the
price was fixed at USD 4.20".
"Nobody had suggested any price higher than USD 3.18
per mmBtu," he said contending that it was arrived by adding
market margin and transportation cost to the USD 2.34 per
mmBtu.
Emphassing that the obligation and binding nature of
the MoU was never in doubt, he said it was intended to
convert the demerger scheme into statutory enforceable
contract between the two groups.
However, things started going wrong for Anil Ambani
since the July 17, 2004 board meeting of RIL when a resolution
was passed giving all powers to Mukesh Ambani, Jethmalani
said.
"The Resolution was humiliating for the younger
brother. RIL board clipped all powers of Anil Ambani," he
said.
The game was to show that Mukesh Ambani was complying
with the MoU but at the same time he was preparing a document
to demolish his younger brother.
Jethmalani at the end of the day-long hearing said
"once the scheme (of demerger) is sanctioned, it is not merely
the powers of the court to enforce it but it is the duty of
the court to enforce it".
"What we are trying to enforce is not the MoU but the
scheme of demerger which is the statutory contract by removing
all obstacles," he said.
PTI
First Published: Tuesday, November 24, 2009, 21:15