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The tussle between Mukesh Ambani-led Reliance Industries and his brother Anil's Reliance Natural Resources over gas supply came to the fore in Bombay High Court on Thursday with RIL alleging that RNRL wanted to trade the fuel as it did not have an operational gas-based power plant.
Hearing an appeal filed by RIL challenging a single judge's order that put restrictions on selling gas, a division bench of Chief Justice Swatanter Kumar and Justice Ranjana Desai adjourned the matter to July 12. It also did not stay the interim order of the single judge that had restrained RIL from selling gas to any other firm except RNRL and NTPC Ltd.
Counsel for RIL Harish Salve argued that though as per the demerger agreement RIL was supposed to provide gas for RNRL's power project or that of its subsidiaries, now the Anil Ambani-led firm wanted gas for "any company where they have stake as less as one per cent". "They really want to trade in the gas, as they don't have a single power project at the moment," Salve alleged.
Countering this, RNRL counsel Mukul Rohtagi said RNRL has received environmental clearance for its 8,000 MW gas-based power plant at Dadri, but it has not been able to tie up funds without firming up gas supply commitment from RIL. Salve also charged RNRL with adopting tactics to block the sale of remaining gas output from KG-D6 block too.
Salve alleged though the single judge's order was regarding only 40 million metric standard cubic meters per day (mmscd) of gas that RNRL is claiming, the company wrote to petroleum ministry that if the government gave approval to price bids received by RIL, it would be a breach
RNRL is claiming that as per the demerger agreement - which divided the Ambani empire between Mukesh and Anil - RIL was bound to supply 28 mmscd of gas, and also another 12 mmscd if RIL's agreement with NTPC did not materialise.
RNRL got a stay from the High Court in May this year, when RIL invited bids for gas purchase.
Salve said RNRL was putting a wrong interpretation on the court's injunction, creating obstacles for selling the remaining portion of gas to other parties too. Unless government approves the price at which the remaining gas is to be sold, it cannot enter into agreement with other buyers.
However, Rohtagi said it was opposed to price fixation and approval by the government at this stage, because that could be used by RIL for denying RNRL gas at the already fixed price, which would be lower.
The Gas Supply Master Agreement - which followed the demerger between the two had fixed the price at 2.34 dollars per million British thermal units.
Salve said RNRL's "game" was "cutting my (client RIL's) whole gas field.....which is of national importance".
The bone of contention between the Ambani brothers is GSMA itself. According to the Anil group, GSMA was finalised when Reliance empire was split but Anil was yet to take over RNRL. "So, it was as if they (Mukesh group) sat on both sides of the table and signed the GSMA," Rohtagi said.
RIL's agreement with state-run power major NTPC Ltd has also run into litigation as the private firm claims the agreement had not been finalised.