RIL said RNRL has maintained that the May 12, 2005 draft agreement between the RIL and NTPC should be the basis for fixing the price of gas from the KG Basin but it has ignored the provision for government approval.
'Govt to lose Rs 40,000 crore due to RIL's escalating costs'.
The Ambani brothers are locked in a bitter battle over the supply and price of the gas from KG basin.
Swiss bank UBS has been fined Pounds 8 million in the United Kingdom after four of its senior employees were found misusing funds of customers, including two companies of Indian industrialist Anil Ambani-led group.
On August 21, the division bench had suggested that the two warring sides should seek the help of their mother Kokilaben Ambani to resolve the issue. The billionaire brothers are fighting over supply of natural gas from RIL's eastern offshore KG gas fields.
Reliance Natural Resources Ltd (RNRL) on Monday continued to slide, falling 9.47 per cent to touch a one year-low of Rs 47.75 on the Bombay Stock Exchange, after the Supreme Court ruled against the company in a gas dispute with Reliance Industries.
RNRL had sought 28 mscmd of gas for 17 years at $2.34 per million British thermal units (mBtu) from Mukesh Ambani's RIL.
Read the full text of the Supreme Court ruling in the Krishna Godavari Basin gas dispute between Mukesh Ambani-led Reliance Industries Ltd and Anil Ambani's Reliance Natural Resources Ltd.
With the Supreme Court likely to announce its judgement on the gas price tussle between Ambani brothers next week, the share price of Reliance Industries Ltd has taken a sharp knock while Reliance Natural Resources Ltd witnessed a spike.
An RIL spokesperson said that the company has filed its reply to the government's petition on the gas dispute.
The two sides had approached Supreme Court challenging a decision by the Bombay high court on June 15, which said RIL should provide 28 million cubic metres of gas per day to RNRL at $2.34 per mmBtu and both the parties should sign a necessary agreement for the same within a month.
The government told the Bombay high court on Friday that the empowered group of ministers decided that Mukesh Ambani-led RIL will start supplying gas from the KG basin to Anil Ambani's Dadri power project and other upcoming power plants once it is ready to begin operations.
Industrialist Anil Ambani on Tuesday dared the petroleum ministry to take back the ownership of gas fields from Reliance Industries Ltd if it seriously believed that terms of the contract were violated by Mukesh Ambani-led firm, which he alleged was wanting to make a super-profit of Rs 50,000 crore (Rs 500 billion).
The Supreme Court on Monday asked Mukesh Ambani-run Reliance Industries Ltd and Anil Ambani group firm Reliance Natural Resources Ltd to reply to the government's prayer for declaring 'null and void' their family agreement on gas supply, and posted the matter for hearing on September 1.
Mukesh Ambani-led RIL said on Friday it would not be possible to supply gas to Anil Ambani group firm RNRL without the government's nod and requested the Supreme Court not to restrain it from selling gas to others.
Blaming RIL for delay in starting its Dadri power project, RNRL said it was RIL's wrongful conduct that delayed its gas-based power plant by four years. However, it had sought a direction to RIL to supply the gas immediatley to it. On July 7, the Supreme Court issued notice to RIL, RNRL and the Centre (as intervener) on cross-appeals by both the companies on their gas supply dispute.
Anil Ambani-promoted Reliance Natural Resources has filed an affidavit in the Bombay High Court in the case involving Reliance Industries, refuting the petroleum ministry's stand that the government-approved price of $4.2/million metric British thermal unit (mmBtu) is the selling price of gas.
Last week, RIL moved the apex court challenging the Bombay high court order that asked it to supply 28 mmscmd of gas to RNRL at $2.34 per mmbtu.
But RIL is yet to agree on the grounds that it is studying the implication of the judgement. On June 15, the Bombay high court gave the two companies a month's time to work out a firm gas volumes, price, timelines and other commercial details for sourcing the fuel from Krishna Godavari basin fields.
A division bench of Justices J N Patel and K K Tated said that the new agreement should be as per the memorandum of understanding between the Ambani brothers Mukesh and Anil. The MoU stipulates that RIL would supply 28 mmscmd of gas to RNRL for 17 years at the rate of $2.43 per million British Thermal Units.
"There would be no impact on the government at all and it would suffer no loss whatsoever. RIL would also make a profit of Rs 30,000 crore (Rs 300 billion) at this rate," RNRL said in an affidavit before a bench headed by chief justice K G Balakrishnan.
During the arguments in the court, Justice J N Patel remarked that the court would like to spend the Diwali vacation writing out the order and would like the parties involved to finish their arguments before that. "We are not hearing the matter because Reliance Industries is a big company. We are hearing it because it is in the nation's interest," remarked Justice Patel.
RIL is relying upon the pleadings in RIL Vs RNRL case to support its defence against NTPC.
According to sources, the government has provided a list of 20 companies to Reliance Industries for sale of gas as per the gas utilisation policy. Some of these companies include Nagarjuna Fertilizer & Chemicals, Chambal Fertilizers & Chemicals, Tata Fertilizers and Oswal Chemicals & Fertilizers among others.
Anil Ambani's Reliance Natural Resources Ltd is laying claim (through a family agreement prior to the group's split) to gas from estranged brother Mukesh Ambani's Reliance Industries Ltd at a fixed price of $2.34 per mBtu
Mukesh Ambani's Reliance Industries Ltd is taking the Bombay High Court order of June 15 on gas supply to Anil Ambani's Reliance Natural Resources Ltd to the Supreme Court."We have been advised to and are filing appropriate proceedings in the Supreme Court against the judgment delivered by the Bombay High Court," it told RNRL in a mail, in reply to an earlier letter sent in the day by the former, demanding that the HC judgement be implemented without more delay.
"There are eight companies (who have put in expression of interest)... RNRL is one of them," said A K Ahuja, managing director, Ratnagiri Gas and Power Pvt Ltd, the company that operates the nation's biggest gas-fired power plant and the adjacent LNG import facility. Others in the fray include state power utility NTPC and GMR. Ahuja said RGPPL will frame the bidding criteria and call for financial bids by next month.
Petroleum secretary RS Pandey declined to comment on the court verdict till the Government received a copy of the order. The Bombay high court on Monday upheld Anil Ambani group firm Reliance Natural Resources Ltd's contention to buy 28 mscmd of gas from Reliance Industries Ltd at USD 2.34 per mmBtu for 17 years.
Lawyer T S Doabia told the court the government's approval was necessary for the rate at which RIL sells the gas to other private parties. The division bench of Justices J N Patel and K K Tated pointed out that, according to RNRL, the government stated in Parliament it would not be fixing the gas price, except for its own share. When told this was not contrary to what Doabia was saying, the court asked him to file an affidavit, clarifying the government's position.
The main issue in the case is terms of Gas Supply Master Agreement whereby Mukesh Ambani-led RIL is to supply natural gas from its Krishna Godavari reserves to Anil Ambani's RNRL. Both parties have filed appeals before division bench, not satisfied with single judge's verdict last year.
The Bombay high court on Monday suggested that the warring Ambani brothers could approach an independent body to resolve their dispute relating to supply of natural gas from the Krishna-Godavari basin. "The MoU is not able to resolve the issue and we would suggest both the parties to approach an independent body for the same," observed justice J N Patel.
NTPC, India's largest thermal power operator, said it will stay away from the ongoing Reliance Industries and Reliance Natural Resources case in the Bombay high court over the supply of KG Basin gas.
Gas production from the country's biggest gas block is less than a year away, but Reliance Industries (RIL), operator of the block in the Krishna-Godavari basin, and Reliance Natural Resources (RNRL), the biggest buyer of gas from the block, have not made headway on renegotiating the sales agreement.
With the stock markets being on a downturn for most part of the year, many asset management companies (AMCs) are sitting on huge piles of cash or cash equivalents, with some equity-oriented funds holding as much as 40 per cent of their assets in cash, a Crisil report pointed out.
In a major relief to Mukesh Ambani-led Reliance Industries Ltd, the Bombay High Court Friday allowed the sale of gas from the Krishna-Godavari basin at $4.20 per million British thermal unit (mBtu) and reserved final judgment on a case brought by Anil Ambani-run Reliance Natural Resources Ltd.
Anil Ambani group firm Reliance Natural Resources on Friday posted a marginal increase in its net profit for the third quarter and said it hopes to get gas from Reliance Industries' KG-D6 fields once the group's Dadri power plant begins operations.
The MoU says the gas supply agreement is with Reliance Energy and for the Dadri power project, senior counsel Harish Salve representing RIL said. "Nowhere does it say that the gas will go to RNRL," Salve told the division bench of Justices J N Patel and K K Tated. REL and RNRL are both Anil Ambani group companies.
The crux of the ongoing court case between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) on Monday was pricing of the gas produced from the Krishna-Godavari (KG) basin.
The Ambani brothers are not yet ready to bury the hatchet. Legal counsels of both the parties say they are ready to fight it out in the court next week. The case is scheduled to come up for hearing on 12 January.
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