‘The 2005 family agreement is between the Ambani brothers’

In this June 24, 2004 file photo, Ambani brothers listen to a share holder at the 30th annual general meeting in Mumbai. File photo: AP  

The Supreme Court on Tuesday took up for final hearing the cross-appeals filed by both Ambani group firms, as also a petition by the Centre against a Bombay High Court order directing Reliance Industries Ltd (RIL) to supply gas to Reliance Natural Resources Ltd (RNRL).

Senior counsel Harish Salve, appearing for the Mukesh Ambani group RIL, who began his submissions before a three-judge Bench of Chief Justice K.G. Balakrishsnan, Justice R.V. Raveendran and Justice P. Sathasivam made it clear that the 2005 family agreement to divide the Reliance group of companies was an agreement between the two Ambani brothers and Mr. Anil Ambani could sue Mr. Mukesh Ambani if he was aggrieved. Mr. Salve submitted that the RIL board had not approved the family MoU that provided for supply of gas by RIL to Anil Ambani group company RNRL. He also assailed the June 15 order of the Division Bench of the Bombay High Court asking RIL to reach an agreement with RNRL for gas supply.

The case pertains to RNRL’s demand that it be supplied 28 million standard cubic metres a day (mscmd) of gas from RIL’s KG-D6 gas fields at a price of $2.34 per million British thermal unit (mBtu) agreed in a 2005 family MoU. RIL, however, contends that it cannot do so in view of the government policy. The Bench is hearing a batch of appeals against a June 15 High Court order that asked RIL to supply gas to RNRL at $2.34 per mBtu against the officially prescribed $4.2 per mBtu.

Before the hearing began, Justice Raveendran told the counsel that he had shares in both the Reliance companies in equal number and wanted to know whether they would have any objection in his hearing the matter. When all the counsel said they did not have any objection, the Bench recorded it and arguments proceeded thereafter.

Justice Raveendran pointed out that “It is not a fight between shareholders as most of the shareholders of RNRL are also shareholders of RIL. They are holding shares in both the companies. It makes no difference to them. It makes difference only to two persons {Ambani brothers} who are the stewards of the companies.”

Mr. Salve argued that the Central Government’s gas pricing policy would prevail over any private agreement and this aspect had been overlooked by the High court in its order. He said the Empowered Group of Ministers had decided that subject to the availability of gas, necessary allocations from RIL KG-D6 fields would be made to various projects and “you are lower down the list of priority in allocation.” He said “RIL itself is buying gas at a higher price for its Jamnagar refinery.” Arguments will continue on Wednesday.

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Printable version | Jun 20, 2021 12:39:09 PM |

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