RNRL had agreed to ‘government approval’ clause: RIL
17 Dec 2009
Reliance Industries Ltd (RIL) today submitted to the Supreme Court that Reliance Natural Resources Ltd (RNRL) had agreed to the clause on 'government approval' (on gas sales) in the discussions that were held after the demerger between the Ambani brothers, Mukesh and Anil.
RIL counsel Harish Salve told the three-judge Supreme Court Bench, that Anil Dhirubhai Ambani Group (ADAG) had recommended that the draft agreement of RIL with NTPC should form the basis for the gas sales and purchase agreement between RIL and RNRL. The three judge bench is headed by chief justice K G Balakrishnan.
He added that it should not be unreasonable for RNRL now to agree to the clause on government approval which comes from the template (of the NTPC draft) which was recommended by RNRL.
RNRL counsel, Mukul Rohatgi told the Supreme Court that it wanted a ''comprehensive end'' to the gas dispute between the Ambani brothers in the national interest and pleaded for the dispute not to be sent to any other forum for further adjudication.
He said that the Supreme Court should put an end to the dispute between the Ambani brothers so that the two businesses could prosper independently.
He told the bench there were two options before it to either remove hurdles in the gas supply agreement or to annul the scheme, which would entail going back to the agreements prior to the demerger scheme of 2005. He added that the second step would be disastrous as nobody wanted it to be taken.
RIL and RNRL have moved the apex court against the 15 June decision of the Bombay High Court under which RIL had been directed to provide 28 million standard cubic metres per day (mscmd) of gas to RNRL at $2.34 per unit for its proposed power plant at Dadri. RIL however cites the government's gas utilisation policy for not doing so under which it cannot sell at a price lower than the government-approved price of $4.2.
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