Kokilaben can’t be arbitrator, reiterates RIL

Reliance Industries Ltd (RIL) yesterday admitted before the Supreme Court that the private memorandum of understanding signed between the Ambani brothers on gas pricing in 2005 reposed ''decisive powers'' in the hands of Kokilaben Ambani, the mother of Mukesh and Anil, in resolving any disputes.

However, it added that Kokilaben's decision could not be binding on the RIL board as this would be contrary to law.

Continuing with his arguments, RIL's senior counsel Harish Salve said strict implementation of the secret family understanding between Kokilaben, Mukesh and Anil Ambani as a binding agreement on RIL and Anil's Reliance Natural Resources Ltd would be disastrous, as both the companies have absolutely no knowledge about its contents.

''If the family agreement is held binding, then RIL does not know what all issues were mentioned in the private document and which of them would be raised in future as a disputing point,'' Salve argued before a bench comprising chief justice K G Balakrishnan and justices B Sudershan Reddy and P Sathasivam.

That was why the board of directors, on coming to know of the family settlement, had appointed a sub-committee to draft the scheme of splitting the original Reliance Industries between the two brothers, which alone was approved, and RIL has fully abided by it, he said. Kokilaben was at best an outsider as far as the scheme of de-merger approved by RIL board was concerned, he added.

''If the MoU is to be held binding as far as the gas dispute was concerned, then RNRL would be in a bigger problem as the family agreement envisaged supply of gas to REL and not to RNRL,'' Salve said.