After keeping a judgement reserved for almost two months, another Supreme Court judge Justice Markandey Katju today withdrew from a dispute between Mukesh Ambani group firm Reliance Industries Ltd and BPCL over price differences in naptha supplied by state-run company to RIL plant in Raigad.
Katju recused himself from the matter saying his wife held shares of Reliance Industries.
While the Bench headed by Justice Katju had on September 1 this year reserved the judgement on the issue, another bench in its interim order in June last year had asked RIL to pay Rs 50 crore (Rs 500 million) against BPCL’s demand of Rs 110 crore (Rs 1.1 billion) within two weeks to BPCL for the price difference in naptha supplied by the state-run company to RIL plant in Raigad.
The court had, however, directed BPCL not to execute the decree allowed earlier by the Bombay High Court in the case.
Today, Justice R V Raveendran, who was a part of the three-judge Bench hearing the ongoing gas dispute between the Ambani brothers, also recused himself from the matter saying his daughter Sunitha Rajesh is a partner with Mumbai-based solicitors firm which is advising RIL in global acquisition matters.
BPCL and Reliance had entered into an agreement in August 1986 for supply of naptha in bulk as a feed stock for manufacture of purified terephthalic acid.
Under the agreement, BPCL had agreed to supply special cut naphtha of 110/140 cut grade for Reliance’s petrochemical plant at Patalganga in Raigad district at Rs 944.87 per MT, the price fixed by the Ministry of Petroleum.
While naphtha was supplied by BPCL, it was processed by RIL in its plant and after extracting PTA the balance naphtha was returned to BPCL.
BPCL increased the price of SCN from Rs 944.87 per MT to Rs 1,054.40 MT (add-on to the Ministry fixed price) in October 1991.
RIL had contended that even the rate of Rs 944.87 per MT was excess but continued to pay at this rate.
Reliance, however, referred the matter to arbitration seeking refund to the tune of more than Rs 40 crore (Rs 400 million) saying BPCL did not incur any excess cost and even the rate of Rs 944.87 per MT was higher.
The arbitrator had in September 2000 rejected RIL’s claim and asked it to pay Rs 44.12 crores (Rs 441 million) plus interest payable at the rate of 11 percent per annum from November 1994.
The Bombay High Court had also dismissed RIL’s petition challenging the arbitration award.
