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SC raises questions on suitable arrangement on Ambani dispute

Hearing the high voltage legal battle between the Ambani brothers, the Supreme Court on Wednesday raised questions on the possibility of the two sides working out a "suitable arrangement" to resolve the gas dispute.

business Updated: Oct 28, 2009 11:19 IST

Hearing the high voltage legal battle between the Ambani brothers, the Supreme Court on Wednesday raised questions on the possibility of the two sides working out a "suitable arrangement" to resolve the gas dispute.

"What suitable arrangement you can make out or arrive at. There must be parameters to arrive at a suitable arrangement," a Bench headed by Chief Justice K G Balakrishnan said.

The Bench was hearing for the fourth day the dispute between RIL and RNRL relating to supply of gas from KG basin for which the two brothers Mukesh Ambani and Anil Ambani are engaged in a bitter fight.

"If you are not able to reach a suitable arrangement... We can direct you to arrive at a suitable arrangement or direct you to go for arbitration," the Bench observed.

Anil's group is seeking gas from his brother's group RIL at rates 44 per cent lower Government-approved price. RIL says it cannot honour the commitment made in the 2005 family agreement due to Government's pricing and gas policies.

When senior advocate Harish Salve was advancing the arguments for RIL, the Bench said, "What is the issue. There was an agreement but you did not arrive at a suitable arrangement and you came to the court. What will the court do?"

"What is suitable arrangement? How will court know about the suitable arrangement between them (Ambani brothers)?" they asked.

Salve said suitable arrangement as per the 2005 agreement is not working.

Salve said there have been a lot of imponderable situations.

The Bench wanted to know about RIL's contention before the Bombay High court that it would still make profit by selling gas at USD 2.34 per million British thermal units (mBtu), Salve said, "No, I did not concede this."

"It is a complex subject. There are sometimes communication slips, we put everything in writing but High Court noted different submissions," Salve said.

Anil knew perfectly well that this is a complex agreement and there were many ifs and buts, Salve argued.

"The MoU, which was not put before the RIL board was not binding. RIL board of directors had no knowledge of the private agreement," he said adding that MoU envisages that 20 units of gas would have to be supplied to REL but the RNRL group said every thing has to be given to it.

Various meetings had taken place between two groups but they failed to arrive at suitable arrangements, he said.