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Government okay for gas price mandatory: RIL

Hearing in the gas row between the Ambani brothers entered the final phase in the Supreme Court on Wednesday with Mukesh Ambani-controlled RIL asserting that government approval on gas pricing was mandatory, a contention opposed by the Anil Ambani-led RNRL.

business Updated: Dec 16, 2009 22:04 IST
HT Correspondent

Hearing in the gas row between the Ambani brothers entered the final phase in the Supreme Court on Wednesday with Mukesh Ambani-controlled RIL asserting that government approval on gas pricing was mandatory, a contention opposed by the Anil Ambani-led RNRL.

RIL said RNRL has maintained that the May 12, 2005 draft agreement between the RIL and NTPC should be the basis for fixing the price of gas from the Krishna-Godavari Basin but has ignored the provision for government approval.

"If you go by the NTPC draft agreement which the RNRL says is the template agreement for the supply of gas then there exists a clause that the price of the gas is subject to the government approval," RIL‘s counsel Harish Salve submitted before a Bench headed by Chief Justice K G Balakrishnan.

RNRL has been demanding the gas at $2.34 (Rs 109) per unit, the rate at which RIL had agreed to supply to the NTPC. "So RNRL‘s contention is vague and absurd," Salve said before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam.

RIL was countering the arguments of RNRL which in its submission on Wednesday claimed that it has always advocated that the dispute can be resolved by mutual discussion.

RNRL‘s counsel Mukul Rohatgi accused the RIL of scuttling the attempt to resolve the dispute out of court. He said the Mukesh Ambani Group had stated that the Supreme Court can decide the gas row. Rohatgi said when the family MoU (Memorandum of Understanding) to divide the assets between the estranged brothers was reached in 2005, K V Kamath, a close friend of the Ambanis, was intrumental in the mediation process and, therefore, there are means for reaching an amicable settlement through negotiations.

Disagreeing with this, Salve said the matter can only be resolved now by the court.