RIL goes to SC: Gas tiff starts from scratch, says Tulsian

Excerpts from What's Hot on CNBC-TV18 Watch the full show » Nifty BSE | NSE 09/02/12 Are Mutual Funds betting on Nifty?

The bitter tussle between Reliance Industries Limited (RIL) and Reliance Natural Resources (RNRL) continues. RIL has said it would move the Supreme Court next week in relation with the KG basin D6 gas case. SP Tulsian of sptulsian.com said the Supreme Court will need to look at the legal complexities in a fresh perspective. "The Supreme Court will now take up the question of law because the interpretation needs to be made of the production sharing-contract, terms of the New Exploration Licensing Policy (NELP), whether the family Memorandum of Understanding (MoU) has any existence, which was not part of the demerger scheme."

Tulsian however said that the move would positive for the RIL stock and negative for the RNRL stock on Thursday.

Also read: RIL-RNRL war of words continues; case to go to SC

Here is a verbatim transcript of SP Tulsian's exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: The latest as you heard - finally seems to be going to Supreme Court, how do you interpret this entire move?

A: It was expected that RIL would move the Supreme Court. The Supreme Court will now take up the question of law because the interpretation needs to be made of the production sharing-contract, terms of the New Exploration Licensing Policy (NELP), whether the family Memorandum of Understanding (MoU) has any existence, which was not part of the demerger scheme. Even the terms of the demerger were not explicit in reference to the quantity, price and tenure on which RNRL has been relying upon.

All these issues will get examined by the Supreme Court.

Q: The other big issue is that should a family agreement be overriding the public good. Is that going to be one of the issues that will come? And how do you see tomorrow's market panning out for both these stocks?

A: This will be seen as a positive for Reliance Industries and negative for RNRL. Coming to your first question, in reference to the cognizance or the weightage given to the family MoU, it has never existed in the public domain. You need to understand the legal weightage to be given by the court to the MoU because if RIL is not allowed to make use of the gas for its captive use, how could it contract to sell it to any other company? Because, then it is are not giving any credence or power to the government when it comes to the allocation. There are a lot many legal issues involved that need to be examined at the Supreme Court level.