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Journalism of Courage
After a long-drawn legal battle between the Ambani brothers,the Bombay High Court today allowed the Mukesh Ambani-led Reliance Industries Ltd to sell gas from KG basin at $4.20.
In an interim order,the High Court vacated the stay which had restrained RIL from selling gas to third parties,after Anil Ambanis RNRL dragged it to court over the gas supply master agreement between the two companies.
Division bench of Justice J N Patel and Justice K K Tated,however,clarified that todays interim order would operate only till the pronouncement of judgement,and wont affect parties rights. The judgement in the case has now been reserved.
The court noted that lifting of stay was necessary as per RILs projections; gas production in KG basin may start by February-end.
Both RIL and the government had sought vacation of stay. Following the hearing,additional solicitor general Mohan Parasaran said that due to todays order,the gas would not go to waste. RIL will have to sell gas as per the governments utilisation policy,at $4.20 per mmBtu.
The order states,The sale of gas would be made by RIL at uniform price of $4.20 to all parties including public sector undertakings and to others in the order of priority as stipulated by the government in the approved gas utilisation policy.
RIL can enter into contracts with other parties for the term of up to five years.
Gas Supply Master Agreement (GSMA) between RIL and RNRL was a fall-out of demerger of Reliance group in January 2006. By this agreement,RIL was to supply 28 MMSCMD of gas to RNRL for Anil Dhirubhai Ambani groups proposed power plant at Dadri.
But RNRL was not happy with the terms of the GSMA,so it moved the High Court. RNRLs grouse was that GSMA was not in accordance with the memorandum of understanding between Anil,Mukesh and their mother Kokilaben Ambani,which set out how the Reliance group will be divided between the brothers.
A single judge of High Court,in 2007,ruled that GSMA was not bankable,and asked both sides to negotiate new contract. But parties failed to work it out,and filed appeals before division bench.
The case took a new turn when the government intervened and stated that it had the right to fix the price,and even dictate to whom RIL should sell gas.
Later,government stated that price of KG gas for all the buyers could not be less than $4.20. RNRL said this was not acceptable,as government had not right to decide terms of contract between RIL and RNRL.
