Pushed into a corner, the Aditya Birla group is considering arbitration to solve the MRPL imbroglio. The group, whose earlier proposals to HPCL, its joint venture partner in MRPL, were turned down, now sees legal recourse as the final option, if its latest offer to gain management control at MRPL is not accepted.
If the Birla group pursues the legal route, it may rely on an agreement which was signed with the Union government in 1987, when the project was conceived. Among other things, it could argue that the administered pricing mechanism for refining (under which refineries were assured of a 12 per cent post-tax return on net worth) was no longer there.
The group may also contend that the joint valuation report submitted a few months back by Arthur Andersen and SBI Caps, which valued MRPL