As the legal battle between Mukesh Ambani-led Reliance Industries (RIL) and Anil Ambani's Reliance Natural Resources (RNRL) draws to a close, RNRL lawyers today made it clear to the Bombay High Court that there would be no compromise on price of natural gas -- the subject of a dispute between the two companies.
The two companies are fighting over a gas sale agreement, whereby RIL is to supply gas to RNRL's power plant.
While concluding his arguement, RNRL lawyer Ram Jethmalani asserted that the price of $4.2 per mmBtu was not acceptable to his client.
RNRL must get gas from KG basin on the same "terms" as the NTPC, Jethmalani said, while arguing that "terms means 'terms' advertised in the NTPC's tender in 2003. These words - 'subject to government approval' - did not exist in the tender".
RIL's case is that though NTPC was to get gas at $2.34 per mmBtu, it was subject to government's approval, and the same rider applies to RNRL too. The government approved price is $4.20 per mmBtu.
Senior advocate Mukul Rohatgi, also arguing on behalf of RNRL, said, "Approval clause will destroy the demerger."
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Jethmalani said that government had earlier stated in Parliament that it would not be fixing gas price, so it cannot dictate price for RIL's sale of gas to others.
He also accused RIL of raising disputes with both NTPC and RNRL (after agreeing on a price of $2.34) as "Mukesh Ambani must have anticipated rise in petroleum prices".
"We got a unilateral deal..The scheme (of demerger) has been breached," he said, referring to RNRL's objection that RIL drafted and executed agreement with RNRL before Anil Ambani could take control of his group companies.