Anil Ambani objects to plans in Haryana SEZ

R-ADAG, on its part, is bidding for oil & gas blocks.

A fresh dispute seems to have erupted between the Ambani brothers, this time centred around Reliance Industries Ltd's huge special economic zone in Haryana.

The Anil Dhirubhai Ambani Group (R-ADAG) has objected to the plan to set up a 2000-Mw power plant in the zone. It is also believed to have voiced objections to the proposal for a cargo airport in the zone, though this could not be confirmed.

R-ADAG has written to the Board of Reliance Industries, as well as sent off a missive to the Haryana government, saying that the power plant plan violates the June 2005 non-compete agreement between the two parties.

Sources in both companies said the non-compete agreement had been ratified by the Bombay High Court, as well as by group shareholders.

When contacted, an R-ADAG spokesperson said: "We have written a letter and are confirming this. The letter has been sent by us, as, according to our non-compete agreement, they (Reliance Industries) cannot have a power project of any sort."

On the twin issues of whether the RIL board had been approached on the issue and an objection raised to the cargo airport plan, the spokesperson added: "I have not seen the letter and cannot comment on whether the board has been approached. I also cannot confirm if any objection has been raised to RIL's cargo airport plan."

On its part, the official spokesperson for Reliance Industries said: "We have not got any letter. All I can say is that this does not fall under the non-compete agreement. R-ADAG is also bidding for oil and gas blocks, and that is a business meant for Reliance Industries."

In response to allegations of the SEZ plans violating the brothers' non-compete pact, the spokesperson said, "RIL has always fulfilled all its commitments and obligations. It will follow the same principles in the future as well."

Sources in the know said Reliance Industries' defence was centred on the argument that the SEZ project was not an "exclusive" business.

"What they seem to have forgotten is that the SEZ project and all the facilities to support it and contained within it are part of normal infrastructure.

In addition, this is not a Reliance project alone "" the Haryana government is an equity stake-holder in the project (10 per cent through the Haryana State Industrial Development Corporation). If they (R-ADAG) choose to interpret it this way, we too can have our interpretations," they said.

The sources added that Reliance Industries was seeking expert legal opinion on the matter as it wanted all possible interpretations to be available in the event the issue turned into a legal fight.

Some indications are available of such a turn of events. Sources in the R-ADAG said while the letters might be treated as "bringing the matter to notice," they would wait before deciding on the next step. That may well be seeking legal recourse, as provided by the family agreement for settlement of a dispute.