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RIL not part of Ambani family MoU; pact is between brothers

RIL not part of Ambani family MoU; pact is between brothers
PTI
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First Published: Tue, Oct 20 2009. 06 40 PM IST
Updated: Tue, Oct 20 2009. 06 40 PM IST
New Delhi: Reliance Industries on Tuesday told the Supreme Court that the 2005 family agreement to divide the Reliance group was a pact between the Ambani brothers and Anil should sue Mukesh if he feels aggrieved.
RIL board had not approved the family memorandum of understanding (MoU) that provides for supply of gas by the company to Anil-led RNRL, Mukesh Ambani-run RIL’s senior counsel Harish Salve said on the first day of hearing on the gas dispute in the apex court.
Hearing petitions by the group firms of both the Ambani brothers, challenging the Bombay high court order of 15 June that asked RIL to reach an agreement with RNRL for gas supply, a bench headed by Chief Justice KG Balakrishnan observed that it is not a fight between shareholders.
The bench said it’s like people of two countries don’t have any problems, but there is a fight between two persons who are heading these countries. “Thus, there is no fight between the two companies, but just between two individuals which has percolated down to the people.”
The court later adjourned the matter for further hearing on Wednesday, when RIL will continue arguments.
RIL on Tuesday argued that it was Anil Ambani group, which had in June 2007 asked the government to frame a national gas utilization policy and now it has gone back.
The case pertains to RNRL’s demand that it be supplied 28 mmscmd of gas from RIL’s KG-D6 gas fields at a price of $2.34 per mmBtu agreed in a 2005 family MoU. RIL, however, contends that it cannot do so in view of the government policy.
The court said: “Neither of the kings are party, but they are shadow boxing (through their companies).”
Agreeing with the observation made by the bench, Salve said: “We do say it’s a shadow boxing. Two corporates are involved... It’s my case that it’s a fight between two heads of companies.”
He went back to arguing that the MoU signed by the family members of the promoter group, segregating the businesses was conditional on fulfillment of conditions including necessary approvals from the companies, relevant regulatory authorities and courts, and signing of a definitive agreement.
The RIL counsel further said that the RNRL petition referred to an agreement reached between promoters, but it did not refer to any document (MoU) nor any such document was produced before the single judge.
“It is RIL’s case that the MoU was not placed before the board and that the members of the board had no knowledge of the terms of the MoU,” the counsel said, adding that the division bench had relied upon the media reports and the board resolution to come to a positive finding that the MoU was placed before the board.
On RNRL’s contention that the government had no role in price fixing for the gas committed to it by RIL, Salve claimed that Adag, in a presentation to Ministry of Chemicals and Fertilisers in June 2007, had “virtually appealed to the government to fully regulate the gas sector in the country by fixing the prices, monitoring the E&P contractors etc.”
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First Published: Tue, Oct 20 2009. 06 40 PM IST
More Topics: RIL | RNRL | Adag | Mukesh Ambani | Anil Ambani |