RNRL files special leave petition in apex court

Written by Economy Bureau | Mumbai | Updated: Jul 4 2009, 07:13am hrs
Anil Ambani-owned Reliance Natural Resources Ltd moved the Supreme Court on Friday, seeking implementation of the Bombay High Court orders that asked Reliance Industries to supply natural gas to it. Later, Reliance Industries filed a caveat in the apex court to ensure that it is given a chance to explain its position in the case.

The dispute between the two companies is over the price of the natural gas from the KG-D6 field, developed by Mukesh Ambani-owned RIL. The special leave petition filed by RNRL is expected to come up for hearing next week. The petition specifically seeks directions from the court to amend the gas supply agreement signed by the two companies in line with the high court findings and for immediate implementation.

On Wednesday, RIL has informed RNRL that it will approach the Supreme Court to challenge the Bombay High Court order. That order has asked RIL to supply 28 million cubic meters of gas per day to RNRL at $2.34 per million British thermal units for 17 years, about 44% less than the price set by a government committee for the product.

The high court also gave the two companies a month's time to work out firm gas volumes, price and the timeline for sourcing the fuel on the basis of MoU that exists between them, prior to the split of the family business in 2005. RIL also informed RNRL through a communication that it would not sign any agreement without the approval of the government.

RNRL obtains gas for the Anil Dhurubhai Ambani Groups power projects. Reliance Infrastructure Ltd operates six power plants in India and plans to build another seven, according to Bloomberg data.

In its petition, RNRL has said that the move was compelled by RILs continued obstructionist position and defying the high court verdict. RNRL is seeking directions from Supreme Court to RIL to execute a bankable agreement in accordance with high court findings. The case is a commercial matter between two corporates.

RNRL also observed that the gas supply obligation was a result of business reorganisation of RIL approved by the then board of directors of RIL and by the Bombay High Court in 2005. The business reorganisation had followed due process of law and had recorded no-objection by the central government.

RNRL counsel Mukul Rohatgi told reporters that RNRL was of the view that the high court should have directed immediate execution of agreement. RNRL had sent multiple letters to RIL.

Rohatgi said, After categorically ruling in our favour, court cannot ask us again to sit down with a party which is not willing to sit across...not now, or even in the past.