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Ambani gas case: HC rules in RNRL's favour

Published on Mon, Jun 15, 2009 at 11:16   |  Updated at Tue, Jun 16, 2009 at 11:28  |  Source : CNBC-TV18

In what is seen as a victory for Reliance Natural Resources (RNRL) in the tussle with Reliance Industries over the KG basin D6 gas, the Bombay High Court on Monday upheld the maintainability of RNRL’s plea and asked RIL to supply gas to the latter to the tune of 28 mmscmd for 17 years at a price of USD 2.34 per mmbtu.

The RIL-RNRL case is related to a conflict over the terms of supply of natural gas from RIL’s Krishna Godavari Basin to Anil Ambani’s Dadri Power plant in Uttar Pradesh. Mukesh Ambani-promoted RIL wanted to sell the gas at USD 4.2 per mmbtu.


The court has asked the two parties to enter into an agreement within a month along the stipulated ruling. The HC also said the parties can approach Kokilaben Ambani — the mother of the estranged industrialists Anil and Mukesh Ambani — to reach an arrangement or approach a company court. The interim order would continue till all remedies for the argument are exhausted, the court said.

An elated Mukul Rohatgi, counsel for RNRL, said, “It has resulted in a complete victory for RNRL. The company will get 28 mmscmd of assured gas supply plus 12 mmscmd if NTPC does not avail of the amount given to it — so it may be 40 mmscmd. RIL had entered into a one-sided agreement and pushed it down the throat of RNRL, and it was contrary to the Memorandum of Understanding [signed during the Reliance demerger]. The court came to a conclusion that the MoU was valid and that the agreement as prepared by RIL was invalid.”

DJ Kakadia, another RNRL counsel, said the court had given RNRL the option to also file for damages.

Meanwhile, Responding to the Bombay High Court judgement, a spokesperson for RIL said, the company was reviewing full text of the Bombay HC order and future action in RNRL Case would be decided based on legal advice. "The full text of the judgement of the Honorable High Court has been received by us and is being reviewed by us. We will decide on the future course of action, based on legal advice."

RIL can now approach the Supreme Court challenging the verdict.

Watch the counsels' reaction in attached video

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