Supreme Court reserves ruling in Ambani gas dispute
19 Dec 2009
The Supreme Court yesterday reserved its verdict on the high-voltage legal dispute over the supply and pricing of natural gas by Reliance Industries Ltd to Reliance Natural Resources Ltd.
The three-member bench of Chief Justice K.G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam reserved the verdict after the conclusion of arguments by all parties. The hearing has lasted 27 days spread over nine weeks.
During Friday's arguments, RNRL counsels Ram Jethmalani and Mukul Rohatgi made a fervent plea to the bench for a direction to Mukesh Ambani-led RIL to supply 28 million units of gas from the Krishna-Godavari for 17 years at $2.34 per unit, as envisaged in the original family pact.
The two counsels argued that RIL was obliged to supply gas to their client as per the family business reorganisation pact, which was not only binding but also supported by a court-ratified statutory scheme.
RIL counsel Harish Salve countered that RIL was not reneging on its commitment to supply gas, but any deal between the two companies needed government approval as per the terms of the production sharing contract (PSC).
Salve said there was no breach of contract of supplying gas from Krishna-Godavari basin at $2.34, but the price, tenure and quantity all needed to be ratified by the government.