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Our Bureau

New Delhi, Oct. 28 The Anil Ambani-promoted Reliance Natural Resources Ltd (RNRL) alleged on Wednesday before the Supreme Court, which is hearing the gas row involving the Ambani brothers, that the Ministry of Petroleum and Natural Gas (MoPNG) was hand-in-glove with the Mukesh Ambani-led Reliance Industries Ltd (RIL) in the dispute over gas supply from the KG basin D6 block.

RNRL said RIL and the Ministry were colluding to prevent it from getting gas at $2.34 per mBtu from RIL.

Mr Ram Jethmalani, senior counsel for RNRL, told a Bench headed by Chief Justice, Mr K.G. Balakrishnan, that “I’m not saying this about the entire Government, but the Ministry is in conspiracy with them (RIL). I will cite documents, place them on record and prove it.”

This is the second time that Mr Jethmalani is raising this charge against the Ministry and RIL. As Mr Harish Salve was informing the court when the final hearing began on October 20 that there were three parties in the case – RIL, RNRL and the Government, Mr Jethmalani had quipped that “read the third party (the Government) as RIL” to say that the Government and RIL are on the same side in the matter.

Mr Harish Salve, senior counsel for RIL, and Mr Mohan Parasaran, the Additional Solicitor General, representing the Government, however, refuted these charges saying they are baseless.

With RIL saying that it cannot sell gas at $2.34 per mBtu as it was not approved by the Government, the Court asked RIL “if the problem is with the Government’s non-approval, then why don’t you fight them (Government)?”

The court also sought to know whether RIL would sell gas at $2.34 per mBtu to RNRL if RNRL succeeds against the Government and gets the sale price of gas to it fixed at that price.

Mr Salve said the contractual arrangements made after the demerger scheme of the Reliance empire (that was approved by the Bombay High Court) could be taken as the “suitable arrangement” to resolve the dispute. These post-demerger scheme arrangements include the Gas Supply Master Agreement (GSMA) and the Gas Supply Purchase Agreement (GSPA), Mr Salve said.

According to RIL, it is ready to sign a specific GSPA with Reliance Energy Ltd, the affiliate company of RNRL, if it is ready with the power plant. RIL would sign a specific GSPA for the quantity of gas they need (up to 28 mscmd) needed by the RNRL-affiliate company. However, the price of supply – that is, $2.34 per mBtu – would be subject to the Government’s approval, RIL said, adding that it was the same terms that RIL offered to sell gas to public sector power major NTPC.

However, significantly, RIL said the matter cannot be resolved through arbitration as the demerger scheme did not have a clause to resolve disputes through arbitration.

When the court asked if the price (of $2.34) that RIL offered to sell gas to NTPC is approved by the Government, Mr Parasaran said this was pending before the Bombay High Court.

The court also queried about the “legal pedigree of the right of the Government to fix the price of gas.”

To this, Mr Salve, replied that the Government’s right stems from the Production Sharing Contract that was in place in the year 2000 itself, much before the Reliance empire demerger and even prior to RIL offering to sell gas at $2.34 per mBtu to public sector power major NTPC.

Mr Salve accused RNRL of cherry-picking parts from the MoU that favours it and denying other provisions that doesn’t suit its interests, including the clause saying price of gas is subject to Government approval.

The court enquired about the role and assets of RNRL. Mr Salve informed the court that RNRL has no physical assets and added that the company’s role included promoting power projects, purchasing gas from RIL and transferring it to REL as well as trading in gas.

More Stories on : Petroleum | Corporate Disputes | Courts/Legal Issues | Reliance Industries Ltd

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