RIL tells SC it is not bound by family MoU

The much-awaited hearing into the high-stake corporate battle between the Ambani brothers over gas pricing commenced on Tuesday...

The much-awaited hearing into the high-stake corporate battle between the Ambani brothers over gas pricing commenced on Tuesday in the Supreme Court,with Reliance Industries Ltd RIL underlining that the 2005 family agreement between the warring brothers was just a pact and it was not bound by it.

Contending that the family MoU which provides for supply of gas by the company to RNRL is not approved by the RIL board,senior advocate Harish Salve arguing for the Mukesh Ambani firm,said the board was not aware of the contents of the MoU arrived at with the help of Kokilaben,the mother of the two brothers. The company and its shareholders are only bound by the scheme of arrangement which has the approval of the creditors,shareholders and the court, he stated.

At the outset,Ram Jethmalani appearing for RNRL objected to the maintainability of the special leave petition filed by the Union of India. The bench stated that the intervention applications of various parties,including SLP of UOI,will be considered only after hearing RIL and RNRL.

As Salve outlined the chronology of the dispute,Chief Justice Balakrishnan was forced to observe,Its like two countries where there is no fight between people and the fight is between the two people heading the countries but the fight percolated down to the people. Neither of the kings are party,but they are shadowboxing.

Salve concurred with the Benchs shadow-boxing observations. We do agree its a shadow boxing. Two corporates are involved8230; Its my case that its a fight between two heads of companies. Salve contended that it was the Anil Ambani group,which had in June 2007 asked the government to frame a national gas utilisation policy and is now backtracking from the policy.

Salve further told the bench that the MoU signed by the family members of the promoter group,segregating the businesses was conditional on fulfillment of conditions including necessary approvals from the companies,relevant regulatory authorities and courts,and signing of a definitive agreement.

The RNRL petition referred to an agreement reached between promoters,but it did not refer to any document MoU nor any such document was produced before the single judge,he pointed out. As the arguments remained inconclusive,the Court posted the matter for further hearing on Wednesday.