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RIL to move Supreme Court on KG gas pricing issue

RIL to move Supreme Court on KG gas pricing issue
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First Published: Thu, Jul 02 2009. 12 00 AM IST

Legal tussle: Anil (left, Pankaj Nangia / Bloomberg) and Mukesh Ambani (Abhijit Bhatlekar / Mint). The high court instructed both companies to seek the counsel of the promoters’ mother, Kokilaben Amba
Legal tussle: Anil (left, Pankaj Nangia / Bloomberg) and Mukesh Ambani (Abhijit Bhatlekar / Mint). The high court instructed both companies to seek the counsel of the promoters’ mother, Kokilaben Amba
Updated: Thu, Jul 02 2009. 12 00 AM IST
Mumbai: Reliance Industries Ltd on Wednesday said it would approach the Supreme Court to appeal a Bombay high court decision in its legal battle with Anil Ambani-led Reliance Natural Resources Ltd (RNRL) over the sharing and pricing of natural gas from the D6 block of the Krishna-Godavari (KG) basin.
The high court had on 15 June instructed both companies to negotiate and arrive at a “suitable arrangement”, a suggestion that quickly devolved into a public battle by letters.
Legal tussle: Anil (left, Pankaj Nangia / Bloomberg) and Mukesh Ambani (Abhijit Bhatlekar / Mint). The high court instructed both companies to seek the counsel of the promoters’ mother, Kokilaben Ambani, in case negotiations fail.
In a Wednesday letter to RNRL, the Mukesh Ambani-led company said, “We do not concur with your interpretation of the findings in the said judgement and the order dated 15th June 2009 and the question of deliberately, wantonly or otherwise defying the implementation of the order of the Hon’ble Court does not arise.”
Earlier on Wednesday, RNRL had written to RIL saying that a Tuesday letter from the latter demonstrated its “intention of deliberately and wantonly defying and avoiding compliance with the directions” of the high court order.
A series of letters have been exchanged between both firms in the past fortnight, with each sticking to exactly the same arguments it presented in the court during the three-year long lawsuit over the sharing and pricing of natural gas from the D-6 block that RIL is developing.
A two-member high court bench, comprising justices J.N. Patel and K.K. Tated, had said in a 15 June order that RIL should honour the family pact that formed the basis of dividing the Reliance business in 2005 and entitled RNRL to receive 28 million standard cubic metres of gas a day (mscmd) for 17 years at the same price as given to state power generator NTPC Ltd. RIL and NTPC are locked in a separate lawsuit over 12 mscmd of gas at $2.34 (Rs112.5) per million British thermal unit—a figure 44% lower than the government mandated price.
The high court also instructed both companies to seek the counsel of the promoters’ mother, Kokilaben Ambani, in case negotiations fail and subsequently approach the company court to modify the scheme of the division of the Reliance group.
RNRL was the first to agree to negotiate, but RIL said late on Tuesday night that since there was “lack of clarity” in the judgement, “our position remains we cannot sign any agreement without the approval of the government on price, quantity and tenure”.
In response, RNRL wrote on Wednesday saying the high court’s “directions are absolutely clear and unambiguous” and the need for government approval had been set aside by the court.
The government’s line of action is unclear with the petroleum and fertilizer ministries saying the assets are a national resource and could not be subject to a family pact. The law ministry on Wednesday said it had “not expressed any view in the matter” and that it has not yet received any reference from petroleum ministry on the KG gas settlement dispute.
The Union government has issued a gas utilization policy listing the gas-starved buyers in order of their needs and RNRL’s claim, if honoured, could jeopardize that priority list as RNRL would be free to sell any gas it gets in the open market.
(PTI contributed to this story.)
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First Published: Thu, Jul 02 2009. 12 00 AM IST