Tuesday, October 7, 2008

The Ambani battle continues

The Ambani brothers Mukesh and Anil, have yet again refused the court’s suggestion to settle their dispute over supply of gas from Godavari basin through an independent authority. The court had asked them to let their mother Kokilaben resolve the battle. Hearing arguments advanced by Mukesh’s Reliance Industries Ltd (RIL), Justice JN Patel suggested that they should take their dispute to an independent authority. Although he did not elaborate on who can be an ‘independent authority’, the court hinted that an expert could hear the dispute. However, RIL’s counsel Harish Salve submitted that the contentions made by both sides were legal and could only be decided by the court and not by an arbitrator or any other independent authority. RIL has bagged a contract for producing gas from Godavari basin and Anil Ambani Group’s Reliance Natural Resources Ltd (RNRL) has staked its claim on buying the gas at a price fixed as per a memorandum of understanding (MoU) signed between the brothers during the Reliance demerger. Salve argued on Monday that RIL is a contractor for the Union government to produce gas from the Godavari basin and has to seek government approval to sell gas to RNRL. “RIL cannot keep gas on the ground and it has to be produced,” he said. Salve said the government had valued the price of the gas at $4.34 per million British Thermal Unit (MBTU) but RNRL is insisting on purchasing gas at $2.34 per MBTU. “RIL is not worried about RNRL’s profits but is concerned about its own losses,” he said. Mukesh’s lawyers also objected to RNRL producing the MoU in court at this stage saying it was not pleaded earlier as a document. The MoU was not enclosed with the appeal filed by RNRL. “You should have enclosed the MoU in the plaint and cannot rely upon it at the stage of arguments. If it was not pleaded as a document, at least RNRL should have indicated who has the document,” Salve said. On a query by the court, Ram Jethmalani, counsel for RNRL, had earlier offered to place a copy of the MoU before the court. He argued that the MoU existed between the two brothers over sharing of certain facilities, including supply of gas from Godavari basin.

No comments: