The two brothers are at it again. Normally, two siblings feuding is as commonplace as potholes on Mumbai roads, but when the two protagonists happen to be two of the wealthiest men in India, and the world, international news bytes are bound to fly.

In the latest chapter of the ongoing saga between the Ambani siblings, elder brother Mukesh is reportedly trying his level best to stymie younger brother Anil's bid to create one of the largest telecommunications companies in the world by entering into a reverse merger with South Africa's MTN. (See: RComm, MTN in share-swap talks: Report)

A reverse merger is a share swap, which in this case, would end up with Anil's Reliance Communications (RCom) becoming a subsidiary of MTN with Anil emerging as the largest shareholder and probable chairman of the merged entity.

Mukesh Ambani, chairman, Reliance Industries (RIL), who had started RCom as Reliance Infocomm had ambitious plans for the communications  firm, which he was forced to cede to younger brother Anil in the settlement when the group was split.

However, RIL has now revisited the Ambani family settlement signed in January 2006 to claim that a decision on a majority stake sale in any of the group companies can be taken only after consultations with the parties involved in the settlement.

MTN, which has 68 million subscribers, is Africa's largest cellular operator. MTN and RCom, with 48 million users, entered exclusive 45-day discussions on 26 May to build a $70 billion emerging market powerhouse after India's top mobile phone company Bharti Airtel ended talks with MTN in a dispute over control. (See: Bharti calls off talks with MTN; alleges breach of terms of agreement)

RIL last night sent a letter to the MTN board saying it has the first right of refusal to buy the controlling interest in RCom, that is, negating MTN's right to do so. An RIL spokesperson said, "RIL has in good faith notified both the ADAG Group and the MTN Group of the stipulations contained in an agreement, the validity of which has never been questioned so far by ADAG." Sources indicate that RIL has also informed some of the investment bankers involved in the RCom-MTN negotiations.

RCom was, however, quick to hit back, describing RIL's claim as "legally and factually untenable and misconceived", and tried to take the moral high ground by accusing RIL of seeking to "disrupt creation of one of the world's most valuable communications companies".

In a strongly-worded press release issued today, RCom said that the so-called agreement of January 12, 2006, was unilaterally signed by RIL's officials, when RCom was under RIL's control. "The procedure was held by the Bombay High Court as unfair and unjust in its judgment dated 15 October, 2006," the release said. RIL has reportedly appealed this decision.

The release didn't mince words as it said that RIL's claim is "borne out of mounting despair and frustration" at Anil Dhirubhai Ambani Group's continuing successes, and the support it enjoys from over 10 million investors, the world's largest shareholding family." RCom officials are also peeved that they received RIL's letter a full 24 hours after it was communicated to the MTN management.

RIL may seek compensation if younger brother's Anil Dhirubhai Ambani Group (ADAG) sells a controlling stake in flagship Reliance Communications Ltd. to South Africa's MTN Group Ltd. a person familiar with the matter said Saturday.

"RIL doesn't want the matter to be dragged to court. Else, they could have sent a legal notice straight away instead of just bringing the contents of the agreement (between Mukesh and Anil Ambani) to the notice of MTN and ADAG",according to the source.

In a strongly worded reply to RIL's threat to go legal against ADAG to enforce its right of first refusal, Anil-led Reliance Communications said, "If RIL choses to take any legal action the same will be vigorously defended by RCom, and RCom would claim cost and damages from RIL."

However, in what could come as a relief to Anil Ambani, the third party in this drama, MTN, still seems to be on his side. The South African company said it was still pursuing merger talks with RCom even after RIL's assertions. MTN spokeswoman Nozipho January-Bardill said,"As far as we are concerned, nothing has changed. We are continuing talks as per our cautionary announcement published last month."

After founder Dhirubhai Ambani's death in 2002, disagreements between his two sons had come out in the open, necessitating a division of the business group's assets between the two. (See: Mukesh Ambani admits he has differences with Anil)

Mukesh kept the oil, gas and petrochemicals businesses of the group flagship Reliance Industries. Anil got Reliance Energy, one of India's biggest power utility firms, the phone company and Reliance Capital, the group's finance arm. Other smaller entities were also hived off during the demerger process  guided by ICICI Bank head KV Kamath on the instructions of the late Dhirubhai's wife Kokilaben. (See: Reliance: The final split and beyond)

Since then, the brothers have been competing to outdo each other and have often made rival bids for the same contracts. They are also locked in another legal dispute as well over the gas pricing for power projects between RIL and Anil's Reliance Natural Resources Ltd (RNRL). (See: RIL to appeal against HC's order)

Only time, and the courts, can decide the next chapter.