RNRL demands Rs50,000 crore damages from RIL for breach of gas supply agreement

13 August 2008

Mumbai: Anil Ambani-led Reliance Natural Resources Ltd (RNRL) has demanded that Mukesh Ambani's Reliance Industries (RIL) pay up Rs50,000 crore damages to scrap the so-called gas sale master agreement (GSMA) signed between the two companies, or alternatively to appoint an expert to renegotiate the gas supply agreement.

RNRL rejected the gas supply agreement, signed between the two in 2005, saying it wants a contract for 17 years and the present contract does not assure certainty of supplies.

RIL, on the other hand, said it does not have enough confirmed gas reserves in Krishna-Godavari basin to accept this demand.

RIL also said it cannot supply gas at $2.34 per million British thermal units (mBTUs) as RNRL insists.

''The court should either appoint an expert (to renegotiate the controversial GSMA) or order RIL to pay us damages,'' RNRL counsel Mukul Rohatgi said during arguments.

RNRL has blamed RIL for delaying its power project in Dadri because the Mukesh Ambani-controlled company hasn't assured it of regular gas supply from the Krishna-Godavari Basin for 17 years.