n what could be a severe blow to Anil Ambani group seeking cheap gas from elder brother Mukesh- led RIL, the Supreme Court has ruled that govt has the last word on pricing and utilisation of national asset.
Giving its verdict on the four-year-old Ambani battle that was intertwined with a bitter public wrangling, a three-judge bench of the court headed by Chief Justice K G Balakrishnan on May7, 2010, said the Ambani family MoU dividing the gas was not binding, both legally as well as technically.
Immediately after the judgement, RNRL Chairman Anil Ambani, who was present at the courtroom, left without taking any questions from the throng of reporters and cameramen.
Stock market responded swiftly to the judgement, with RIL shares shooting up by about five percent to nearly Rs 1050 and that of RNRL tanked close to 20 percent close to Rs 55.
“RIL does not have absolute right over gas and price is subject to government approval… since MoU (of the Ambani family) has not been made public, it does not fall in the corporate domain… Under the Production Sharing Contract, it is for the government to evaluate the price of fuel,” Justice P Sathasivam said, reading out the verdict.
Within minutes, the government welcomed the verdict upholding its sovereign right on pricing and utilisation of gas.
“No matter what campaign one ran against the government, the nation is supreme” Oil Minister Murli Deora said without naming Anil Ambani group which had cast aspersions on his ministry for allegedly siding with Mukesh-led RIL.
The court also directed RIL to initiate negotiations with RNRL within six weeks to arrive at a sale agreement within the framework of government policy.
RNRL had contended that it was entitled to 28 mmscmd of gas a day from RIL’s eastern offshore KG-D6 fields, at USD 2.34 per mmBtu, a price 44 percent lower than government approved rate of USD 4.20 per mmBtu.
Govt stand vindicated: Deora on RIL-RNRL case verdict
Oil Minister Murli Deora, who faced flak for intervening in the gas dispute between the Ambani brothers, has welcomed the Supreme Court verdict saying the govt stand that gas belongs to the nation has been vindicated.
Immediately after the Supreme Court upheld the government’s right to fix price of gas and decide its utilisation, Deora said “SC verdict upholds the fact that gas belongs to the government and the people of the country and that is what we have been saying.”
The court said that the Ambani family MoU seeking to divide gas between Reliance Industries and Reliance Natural Resources Ltd was not binding, both legally and technically.
In the midst of the court battle, the government had also moved the Supreme Court asserting its sovereign right on pricing and utilisation, even as RIL said that it had fixed the gas price at USD 4.20 per mmBtu as per the government policy.
The government’s intervention in the case had made Deora the target of Opposition parties’ attack both inside and outside Parliament.
Anil Ambani group had carried front page advertisements in newspapers, accusing Deora’s ministry of trying to bailout RIL from its obligation under the Ambani family MoU to supply 28 mmscmd of gas to RNRL at a price of USD 2.34 per mmBtu