Why Can’t Ambani Brothers Negotiate Gas Dispute: SC

The Supreme Court has asked firms owned by Ambani brothers, RIL and RNRL, as to why they cannot find a solution to their dispute over gas supply through arbitration or mediation.

A bench headed by the Chief Justice KG Balakrishnan, while hearing the dispute over supply of gas by RIL to RNRL at $2.34 per mmBtu, said that the two sides could reach at a “suitable arrangement” through arbitration, for the Bombay High Court that approved the Reliance empire’s demerger cannot spell what is the ideal arrangement.

In response, Mukesh Ambani-run RIL, continuing its arguments for the second day today, said that it deemed the government’s gas utilisation and pricing policy as the “suitable arrangement”.

In addition, RIL counsel Harish Salve opposed petition filed by RNRL for dismissal of RIL’s petition, saying that only his client’s creditors or members of the Board can challenge maintainability of the petition. Salve contended that RNRL was a third party and hence, cannot seek dismissal of RIL’s plea.

It may be mentioned that RNRL has also separately challenged the government’s petition in the dispute.

The Ambani gas dispute pertains to RNRL’s demand that it be supplied 28 mmscmd of gas from RIL’s KG-D6 gas fields at a price $2.34 per mmBtu agreed in a 2005 family MoU.

RIL, however, contends that it cannot do so in view of the government policy, which in 2007 approved $4.20 per mmBtu as price for gas from the KG-D6 fields.
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