Business Daily from THE HINDU group of publications
Friday, Jul 20, 2007
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Business Daily from THE HINDU group of publications Friday, Jul 20, 2007 ePaper |
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Corporate
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Corporate Disputes
Our Bureau Mumbai, July 19 The gas supply master agreement has emerged as a major bone of contention between the Ambani brothers. Reliance Natural Resources Ltd (RNRL), an Anil Ambani group company, has sought changes in the agreement through the intervention of the Bombay High Court. The company had signed the gas supply agreement on January 12, 2006 with Reliance Industries Ltd (RIL) for gas from the RIL-controlled KG basin fields. RNRL was taken over by the Anil Ambani group on February 7, 2006. In its application before the court, it said that gas supply agreement was structured in favour of RIL and that it was signed even before when the Anil Ambani Group gained management control. On Thursday, RNRL counsel Mr Mukul Rohatgi said that clauses in the agreement like cap on the default liability of RIL in the eventuality of non-supply of gas were not acceptable. RNRL would get a limited compensation from RIL if it does not supply gas on time, he added. Mega projects
Mr Rohatgi also said that the agreement makes mega power projects like Dadri – being set up by Reliance Energy Ltd of the Anil Ambani group – difficult to execute. Given the vague nature of some of the clauses, the Dadri project may not qualify for a bank loan. The project would require Rs 40,000 crore, of which Rs 10,000 crore would be RNRL equity and Rs 30,000 crore would be debt that would have to be raised from banks, he said. The next hearing of the case is on July 26.
More Stories on : Corporate Disputes | Reliance Industries Ltd | Courts/Legal Issues | Petroleum
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