Reliance Industries Ltd (RIL) today told the Supreme Court that the gas dispute between the company and Reliance Natural Resources Ltd (RNRL) cannot be put to arbitration, and resolution to the dispute lies in the relevant section of the Companies Act.
Parekh and Co, advocates for RIL, gave a written statement on this to the apex court.
The scheme of demerger (of the original Reliance empire) did not make any mention of arbitration and it only contemplated that RIL will demerge its subsidiary company (RNRL) and hand over assets, the statement said, adding that issues obstructing a suitable arrangement in gas supply are beyond the purview of the demerger scheme.
“What RNRL is seeking is way beyond the scheme — it seeks an order for specific performance of the MoU (at the time of demerger),” said RIL. It also said the demerger scheme involves ‘issues of public interest and public policy’ and therefore it cannot be put to a dispute resolution mechanism.
The submission comes after the Bench at the apex court, during the course of case hearing, enquired about the possibility of arbitration between the two companies. “There are some parameters to arrive at suitable arrangements for supply of gas,” Justice R V Raveendran said on Tuesday. “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.”
RIL and RNRL have moved the apex court on the Bombay High Court order of June 15, which had asked RIL to provide 28 million standard cubic metres per day of gas to RNRL at a price of $2.34 mBtu. RIL, however, contends that it cannot do so in view of government policy. It has also said it cannot sell at a price lower than the government approved price of $4.2.