Fight between brothers, not shareholders: SC
The hearing on the gas dispute between Mukesh Ambani-led RIL and Anil Ambani’s RNRL began with the Supreme Court posing basic questions to the parties to get to the bottom of the case.business Updated: Oct 20, 2009 21:12 IST
The hearing on the gas dispute between Mukesh Ambani-led Reliance Industries Ltd (RIL) and Anil Ambani’s Reliance Natural Resources Ltd (RNRL) began on Tuesday with the Supreme Court posing basic questions to the
parties to get to the bottom of the case.
A three-judge bench headed by Chief Justice of India K.G. Balakrishnan sought to know if the same set of people were shareholders of both RIL and RNRL, why the two companies were fighting a legal battle.
“It is not a fight between shareholders,” Justice R.V. Raveendran, one of the judges on the bench, said. “They (Ambanis) are shadow-boxing…”
After senior advocate Harish Salve, representing RIL, said the shareholders of the companies were the same, Justice Raveendran went on to say that the dispute over natural gas from Krishna-Godavari basin in Andhra Pradesh was not a fight between two companies, but one between the two brothers.
“It’s like two countries, where there is no fight between their people. The fight is between the two persons, who are heading the countries. But the fight has percolated down to the people,” Justice Raveendran, who cautioned journalists against reporting the court’s observations as an expression of opinion on the case, said.
The court is hearing counter-appeals filed by RIL and RNRL against the June 15, 2009 order of the Bombay High Court that upheld the Ambanis’ family agreement and directed RIL and RNRL to accordingly enter into a gas supply pact within a month.
The Centre too has filed a petition in the SC.
At the very outset, Justice Raveendran declared that he held equal number of shares in both the companies and sought to know if anybody had any objection to that. To this lawyers for the parties answered in the negative.
Commencing RIL’s arguments, Salve said the 2005 family agreement of the Ambanis to divide the Reliance empire was a pact between the two brothers and the high court was wrong in giving it precedence over the demerger scheme of the undivided RIL approved by board of directors of the company.
Salve said if Anil was aggrieved by non-implementation of the family agreement, he can sue Mukesh and not RIL, because the RIL board had not approved the family agreement that provided for supply of
The dispute pertains to RNRL’s demand that it be supplied 28 mmscmd of gas from RIL’s KG-D6 gas fields at a price of $2.34 (Rs 108) per unit agreed in the family agreement. RIL, however, contends that it cannot do so in view of the government policy, under which he can sell at $4.20 (Rs 200) per unit.
As Salve’s arguments remained inconclusive, the bench adjourned the case to Wednesday.