Thursday, October 16, 2008

Explain interest in RIL-RNRL case: Bombay HC to govt

THE Bombay High Court on Thursday asked the government to explain why it was interested in the legal tussle between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) over supply of gas from the Mukesh Ambani-led firm’s KG basin for the latter’s proposed power plant at Dadri in Uttar Pradesh. This happened after the government sought to be a party to the case. The government counsel will present his case on Friday. RNRL lawyer Ram Jethmalani said the government has not intervened in the case between RIL and NTPC, a stateowned firm, but it had sought to intervene in this case. Mr Jethmalani said the government has no right to intervene in the contract between RIL and RNRL. Government counsel T S Doabia said the government has an interest in the case as it had a production sharing contract with RIL. The High Court has restrained RIL from entering into contracts with parties other than RNRL and NTPC for sale of gas. But Justice J N Patel on Thursday pointed out the stay did not affect the production sharing contract between the government and RIL. The court has asked if RNRL could sell gas to NTPC at the same terms and conditions decided initially between RIL and NTPC before the demerger of the Reliance empire. This was in response to Mr Jethmalani’s submission to the court, seeking an order so that RNRL could get 40 million metric standard cubic meters of gas per day from RIL. If this happens, Mr Jethmalani said, RNRL would provide 12 mmscmd of gas to NTPC as per RIL-NTPC contract. The contract envisaged the sale to NTPC would take place at $2.34 per metric million British thermal unit. Mr Jethmalanai also argued RNRL should be allowed to sell gas to third parties till its own power plant is set up. This appears to run counter to the RIL-RNRL pact, which says the latter can draw gas for its own use.

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