New Delhi: Two of the top corporate houses
— headed by estranged industrialist brothers Mukesh and Anil
Ambani — are set for a showdown in the Supreme Court, which
will on Tuesday commence hearing on their gas supply dispute.
The fight relates to supply of gas to Anil Ambani group's
Reliance Natural Resources Ltd (RNRL) from D6 block in
Krishna-Godavari eastern offshore fields of elder sibling
Mukesh-led Reliance Industries (RIL).
Days before the beginning of hearing in Supreme Court,
Anil Ambani also made a surprise truce offer to resolve the
dispute cordially, but Mukesh Ambani questioned its sincerity
without rejecting the proposal.
In a public statement on October 11, Anil said all the
disagreements could be resolved within weeks, but RIL
questioned the sincerity of the offer made "through the public
domain" and said Anil could have easily contacted his elder
brother directly.
RIL also asked Anil to demonstrate the bonafide of his
intentions behind the latest overture, adding it "welcomes
this positive indicator and will not be found wanting in
responding to them constructively."
While RNRL is seeking supply of natural gas at a
previously agreed price of USD 2.34 per mmBtu, RIL contends
that it cannot do so as the government approved the rate for
the gas at USD 4.2 per mmBtu and it would not make profit at
a price committed in 2005.
RNRL is seeking a minimum 28 million standard cubic
meters per day, or more than one-third of the peak output from
RIL's KG-D6 fields, for a period of 17 years.
The two parties approached the Supreme Court following a
Bombay High Court ruling on June 15, where RIL was asked to
honour its commitment in the 2005 family settlement agreement
for supply of gas to RNRL and both parties were directed to
finalise a pact within a month.
Besides their initial cross-appeals, both parties have
filed a number of affidavits and submitted various documents
related to their case with the Supreme Court, which would
begin hearing on October 20 on these as also the admissibility
of a petition filed by the central government.
The government has sought to become party to the dispute
and has contended that national resources cannot be
appropriated through private family arrangements and it alone
holds the right to approve rates and decide on customers
keeping national priorities in mind.
Last week, the Petroleum Ministry also sought to expand
the legal team that would argue the government's stand on the
Ambani gas dispute before the apex court.
Among the various affidavits filed with the Supreme Court
in this case, directors of RIL have separately contended that
the company's board had not approved the family MoU, which
divided gas between companies run by the two brothers.
Bureau Report
First Published: Sunday, October 18, 2009, 20:46