Monday, July 20, 2009

Hearing on Reliance gas dispute adjourned to Sep 1

The Supreme Court Monday adjourned till Sep 1 its hearing on a row between Mukesh Ambani's Reliance Industries and his brother Anil's Reliance Natural Resources over natural gas supplies and asked the two parties to reply to the government stand on the matter.

Commencing the hearing on the petition filed by Reliance Industries that challenges the verdict of the Bombay High Court last month on gas supplies from Krishna-Godavari Basin, off the Andhra Pradesh coast, the apex court declined to pass any interim order.

Chief Justice K.G. Balakrishnan issued notices to power firms such as GMR, GVK and Gautami Power that sought to intervene in the matter on concerns over the impact on the supplies if the fuel is diverted to Reliance Natural Resources at lower rates.

The Bombay High Court had asked Reliance Industries to supply 28 million units of gas to Reliance Natural Resources for 17 years at $2.34 per unit, after assigning 12 million units to the state-run National Thermal Power Corp.

It was also decided during Monday's hearing to club all petitions in this regard when the case comes up before a three-member bench to be set up. The government has sought to join the case as an intervener, amid opposition by Anil Ambani's firm.

"The court said it wants to hear the case with three judges. So it set Sep 1 as the next date. There were no observations, no directions," said Ram Jethmalani, who is appearing as a lawyer on behalf of Reliance Natural Resources.

"One thing is very clear -- the Supreme Court is concerned by the importance of this case," said Harish Salve who appeared on behalf of Reliance Industries and maintained that the court had not stopped Reliance Industries from selling gas to other parties.

"The interpretation doesn't change after the hearing. In fact, let's be clear. I told the court that the arrangements in place would continue. The court said we have not stopped you," Salve said.

He said the crux of the case was whether a family arrangement that was meant to bring parity between two brothers should override sovereign policies when natural gas is now being sold for $4.20 per unit and one party still wants it for $2.34 per unit.

The senior counsel also maintained that the pact between the two brothers could not be broken into bits and pieces. "The agreement said it is subject to company approval, it is subject to government approval. It expressly said so."

But in the reply to the law suit filed by Reliance Industries, the Anil Ambani-led firm has said the petroleum ministry has no role to play in the private gas sharing dispute, certainly not as a party to the row, and that the government will not lose any revenue.

"The petroleum ministry filed the affidavit blatantly and openly in support of Reliance Industries. This affidavit should, therefore, be struck off the records of the Supreme Court," the company said.

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