ADAG moves SC against RIL to execute gas pact

Two days after Reliance Industries said it would move the Surpeme Court against the Bombay High Court’s order on gas supply...

Written by Express News Service | Mumbai | Published: July 4, 2009 3:28 am

Two days after Reliance Industries said it would move the Surpeme Court against the Bombay High Court’s order on gas supply,Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) on Friday filed a special leave petition (SLP) in the Supreme Court,seeking directions from the apex court to RIL to execute a bankable agreement in accordance with the High Court’s findings. RIL also filed a caveat in the Supreme Court to ensure it is given a chance to explain itself in the case.

RNRL filed the petitions challenging the final section of the High Court order asking RNRL to again negotiate after “ruling in our favour in terms of price of gas,tenure and quantity”. The SLP seeks directions from the apex court to amend the Gas Supply Agreement strictly in line with the High Court findings and for immediate implementation of the same.

RNRL said the High Court order required RIL to sign a bankable agreement within 30 days. “RIL continued to adopt a completely obstructionist position and conveyed its reluctance to sign agreement as per court order. The High Court has given clear and unambiguous findings with respect to the quantity (28-40 MMSCMd),the period of supply (17 years),the price ($2.34/ mmbtu) and other key terms,” RNRL said. RIL had refused to sign the gas agreement,saying,“We cannot sign any agreement without approval of the government on price,quantity and tenure.”

The tenure,price and other key terms were the same as that of the gas supply contract awarded by NTPC to RIL,pursuant to international competitive bidding conducted under the aegis of power ministry,RNRL said. “The move compelled by RIL’s continued obstructionist position and defying the High Court verdict,” it said. RNRL said gas supply obligation was a result of business reorganisation of Reliance Industries approved by the board of directors,over 20 lakh shareholders 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 Centre,it said. The case is a commercial matter between two listed public companies. “RIL has frustrated setting up of new environment friendly,clean,green gas-based power plants of over 12,000 MW capacity of Reliance ADA Group and of NTPC amidst severe power shortage,therefore holding an investment of over Rs 50,000 crore at ransom,” RNRL said. The Bombay High Court had ruled that RNRL should get gas from RIL at a price of $2.34 per mmbtu,but had asked the two companies to firm up an agreement on related issues within a month.

Feud continues

• Bombay HC had ruled that RNRL should get gas from RIL at $2.34 per mmbtu

• Had asked the two companies to firm up an agreement within a month,but no accord reached

• RNRL has now filed a SLP in the Supreme Court seeking directions to RIL to execute a bankable agreement in accordance with HC’s findings

• RIL has filed a caveat in the Supreme Court to ensure it is given a chance to explain itself in the case

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