Apex court dismisses intervention plea in KG basin gas dispute

Apex court dismisses intervention plea in KG basin gas dispute

Mumbai: The Supreme Court on Monday refused permission to a Pune-based lawyer B.A. Aloor to intervene in a dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL) over sale of natural gas found off India’s eastern coast. Aloor’s petition was earlier dismissed by the Bombay high court.

The decision, by a bench of justices Arijit Pasayat and Mukundakam Sharma, came a day before arguments are set to resume at the Bombay high court between lawyers representing Mukesh Ambani’s RIL and Anil Ambani-led RNRL over the gas off the Krishna-Godavari (KG) basin.

The two firms are embroiled in a lawsuit over RNRL’s entitlement to 28 million standard cubic metres per day (mscmd) of KG basin gas for 17 years at $2.34 (about Rs110 today) per million British thermal unit from RIL. While RIL is the developer of the gas fields that will produce 80 mscmd at peak capacity, RNRL is claiming a portion of the output, citing a family demerger agreement that allegedly promised it gas.

Portions of the confidential family agreement were produced by RNRL counsel Ram Jethmalani in court last month. The document, however, has been kept out of the public proceedings.

RIL began production in September and pegged a January date for full-fledged output—a deadline that hinges on the outcome of the lawsuit.

Currently, the gas being extracted along with oil is being injected back into the ground because of a lack of agreement on who it should go to.

The Bombay high court had on 15 October dismissed Aloor’s petition to intervene in the lawsuit. A two-judge bench of justices J.N. Patel and K.K. Tated had ruled that Aloor had no “locus standi", or right to bring an action, in the case.

Spokesmen for RIL and RNRL declined comment on dismissal of Aloor’s petition by the apex court, saying the special leave petition was independently filed and not moved by their respective companies.

Mint could not contact Aloor or independently ascertain the interests he represents.

On Tuesday, when the Bombay high court resumes hearing the case, the Indian government—which was last month allowed to plead in the case as the owner of India’s natural resources—will put forward its arguments. A ruling is expected later this month.

Malathi Nayak contributed to this story.