SC again tells RIL, RNRL to resolve gas dispute mutually
27 October 2009
Apparently fed up with the complex dispute between the two Ambani brothers over the pricing of natural gas produced by Reliance Industries Ltd from the Krishna-Godavari gas fields and the union government waiting to join as a third party, the Supreme Court today once again suggested that Mukesh Ambani's RIL and Anil Ambani's Reliance Natural Resources Ltd negotiate for a mutually agreed solution.
The apex court hinted that if the parties found no mutual solution, it might order arbitration to arrive at a suitable arrangement for the supply and pricing of the gas.
The court observed that gas is a national resource and is subject to contract between the government and the contractor, in this case RIL. "See what suitable arrangement you can make or arrive at. There must be parameters to arrive at a suitable arrangement," a bench headed by Chief Justice K G Balakrishnan said.
The bench was hearing for the fourth day the dispute between RIL and RNRL relating to supply of gas from KG basin. "If you are not able to reach a suitable arrangement we can direct you to arrive at a suitable arrangement or direct you to go for arbitration," the bench observed.
RNRL is seeking gas from RIL at rates 44 per cent lower than the government-approved price, under an agreement reached in 2005, when the brothers parted company. RIL says it cannot honour the commitment made in the family agreement due to the government's pricing and gas policies.
When senior advocate Harish Salve argued for RIL that the 2005 agreement is not working, the bench asked, "What is the issue? There was an agreement but you did not arrive at a suitable arrangement and you came to the court. What will the court do? How will court know what is a suitable arrangement between them (the Ambani brothers)?"