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Reliance gas dispute not between companies but brothers: SC

The dispute over natural gas from Krishna-Godavari basin is not a fight between two companies, but one between two brothers, Mukesh and Anil Ambani, the Supreme Court observed on Tuesday, as it commenced hearing the high-profile legal battle.

business Updated: Oct 20, 2009 21:35 IST

The dispute over natural gas from Krishna-Godavari basin is not a fight between two companies, but one between two brothers, Mukesh and Anil Ambani, the Supreme Court observed on Tuesday, as it commenced hearing the high-profile legal battle.

"It's like two countries, where there is no fight between their people," observed the three-member bench of Chief Justice K G Balakrishnan, Justice R V Raveendran and Justice P Sathasivam.

"The fight is between the two persons, who are heading the country. But the fight has percolated down to the people," the bench added, while hearing the arguments by senior counsel Harish Salve, appearing for Mukesh Ambani-led Reliance Industries.

During the two-hour hearing, the bench also said the battle was personal in nature.

The court also asked the media to exercise restraint and said the observations by the justices were only intended to elicit the views of the contending counsels and should not be construed as an expression of their views.

The arguments by Reliance Industries counsel remained inconclusive and will resume on Wednesday.

At the crux of the dispute is the supply of natural gas from the Krishna-Godavari basin, awarded for exploration and harnessing to Reliance Industries, before a split in 2005 in the group founded by legendary industrialist, the late Dhirubhai Ambani.

Based on a family reorganisation pact, the Anil Ambani Group wants 28 million units of gas per day for 17 years at $2.34 per unit. But Reliance Industries says it can only sell it for $4.20 per unit, claiming this was the price approved by the government.

The Bombay High Court had upheld the claim by the younger brother Anil Ambani's group in a verdict delivered in June, which was challenged by Reliance Industries in the apex court.

The government, too, has joined the dispute as an interested party, saying gas was the property of the state and cannot be fought over by two rival corporate houses.