We are not part of family MoU: RIL

Mukesh Ambani’s Reliance Industries Ltd (RIL) today told the Supreme Court that the 2005 family agreement to divide the Reliance empire was a pact between the Ambani brothers and that Anil Ambani should sue brother Mukesh if he felt aggrieved.

The RIL board had not approved the family Memorandum of Understanding (MoU) that provides for supply of gas by the company to Anil-led RNRL, nor was the board aware of the contents of the MoU, RIL’s senior counsel Harish Salve said on the first day of hearing in the apex court. The case is being heard by a Bench comprising Chief Justice K G Balakrishnan and Justices P Sathasivam and R V Raveendran.

The Bench observed the gas dispute was not a fight between shareholders. The Bench said it seemed akin to people of two countries who do not have any problems, but there was a fight between the two persons heading these countries. “Thus, there is no fight between the two companies, but just between two individuals which has percolated down to the people.” Following today’s two-hour hearing, the court adjourned the matter for tomorrow, when RIL will continue arguments.

RIL and RNRL have moved the apex court on the June 15 decision of the Bombay High Court which had asked RIL to provide 28 million standard cubic metres per day (mscmd) of gas to RNRL at a price of $2.34 per million British thermal unit (mBtu). RIL, however, contends that it cannot do so in view of the government policy. It says it cannot sell at a price lower than the government approved price of $4.2.

In its arguments, RIL said it was the Anil Ambani group which, in June 2007, asked the government to frame a national gas utilisation policy to regulate supply.

 

POINTS IN CASE

# With more than 30 fat volumes of documents from the Bombay High Court proceedings, and over 20 new volumes in the five new appeals in the Supreme Court, the judges seemed to have found the paper mounts unwieldy. One judge asked the parties to “make a common bundle” and added: “At least agree on this.” Counsel on all sides said they would agree to sit down and bring the volumes down to 30 very soon.

# At the end of the hearing, there was a request to the media from the Bench, to show discretion in reporting. “When we put certain questions to the counsel, it is meant to elicit a response. They should not be taken as expression of opinion of the court,” the judges said.

# Before the hearing began, Justice R V Raveendran, who replaced Justice B S Chauhan on the Bench, disclosed that he had shares in both RIL and RNRL. He clarified amid smiles in the court room that the number of shares he held in both the litigating companies were equal. No counsel objected. Harish Salve, senior counsel for RIL, wanted the court to put it on record so that it would not become another issue as in the Vedanta case, in which Justice S H Kapadia had to clarify his stand recently.

# The way the hearing trundled on the first day, several people laid bets on the number of days the case would take. One lawyer from the RIL brood estimated that the hearing would go on “at least for six weeks”. Some thought it was a conservative estimate and the hearing would enter December. Harish Salve for RIL and Ram Jethmalani for RNRL are only two of the legal eagles on the front row. The second row was also occupied by senior counsels from Delhi and Mumbai. Then there are some missing regulars who could not join in because they had acted as retainers for both the Ambani brothers.

# The hearing would take place from 10.30 am till 4 pm on Tuesdays, Wednesdays and Thursdays. Some lawyers wished that the Indian Supreme Court adopted the US Supreme Court’s tradition which, reportedly, gives only half an hour to each side. At the thirtieth minute, a red light goes on — that is the end of the oral arguments.

# The Supreme Court does not follow any schedule for delivering its judgements, though it has set rules for the High Courts. In some cases where the hearing had closed nearly a year ago, the judgment is yet to be delivered by the Constitution Bench headed by the Chief Justice. In any case, the judgment in the Ambani appeals cannot be expected this year, according to observers.

# One judge compared the battle of the Ambanis to one between two countries. The people of the warring nations are happy and do not want war. Reliance shareholders are in their position, but the leaders want to fight. Salve agreed that it is the kings who want to fight. Counsel described this as “shadow boxing”; shareholders are not in it. “That is why RIL says, ‘take the fight elsewhere’,” he said.

— M J Antony