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Renegotiate pact on Reliance gas: SC
New Delhi, May 7 (IANS):
Published on 7 May. 2010 11:23 PM IST
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The Supreme Court Friday ordered re-negotiation of the agreement on the supply and pricing of natural gas from the Krishna-Godavari basin between the two Reliance groups within six weeks, based on the government’s policy on the subject.
A three member bench of Chief Justice K.G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam also asked Mukesh Ambani-led Reliance Industries and Anil Ambani-led Reliance Natural Resources to place the new agreement before the company bench of the Bombay High Court.
The much-awaited judgment said the agreement between the two brothers should serve as the “guiding tool” in reaching the new gas supply and pricing pact within the guidelines of the the government.
The agreement between the two brothers concerned the price, quantity and tenure of gas supplies by Reliance Industries. It called for 28 million units of gas a day to be sold to Reliance Natural Resources at $2.34 per unit for 17 years.
“We respect the judgment of the honourable Supreme Court and note that the Supreme Court has safeguarded the interests of over 25 lakh Reliance Natural Resources shareholders,” said Reliance Natural Resources chairman Anil Ambani.
Addressing a teleconference with reporters, he said the apex court had made it clear the arrangement between the two companies should be suitable to both parties, adding he now looked forward to an expeditious and successful re-negotiation within six weeks.
“While giving the guidelines for an expeditious finalisation of the gas supply agrement between Reliance Industries and Reliance Natural Resources, by majority judgment the honourable Supreme Court has upheld Reliance Natural Resources’ case,” he said.
“The honourable Supreme Court has upheld the memorandum of understanding signed on June 18, 2005, served as the backdrop for the scheme and is the guiding force and the basis of the scheme of arrangements for business reorganisation of Reliance Industries.”
Anil accepts SC verdict
Reliance-Ani Dhirubhai Ambani Group (R-ADAG) chairman Anil Ambani Friday said he accepted the Supreme Court verdict that rejected cheap gas to group firm RNRL from Mukesh Ambani-led RIL, and ruled out filing review petition against the judgement.
“We respect the judgement of the Supreme; we note that SC has safeguarded interest of over 25 lakh RNRL shareholders by giving guidelines for gas supply agreement,”
Anil Ambani said in a conference call hours after the apex court delivered its verdict over the four-year long gas row between the billionaire brothers.
“RNRL looks forward to an expeditious and successful renegotiation with RIL within the stipulated period of six weeks to secure gas supply for the group’s power plants in line with the Supreme Court order,” Ambani said.
In the dispute, where RNRL sought gas at a concessional price of USD 2.34 per mmBtu as against the government approved USD 4.20 per mmBtu, the Supreme Court said the government has the last word on pricing and usage.
It also asked RIL and RNRL to renegotiate gas supply terms within six weeks.
“RNRL has currently no plans to file a review petition in the Supreme Court,” Ambani said.
Anil Ambani, who left the court without taking any questions from reporters after the judgement was pronounced, said the court has safeguarded the interests of 25 lakh shareholders of RNRL by issuing guidelines for expeditious finalisation of gas supply agreement.
“By a majority judgement, the Supreme Court has upheld RNRL’s case that the company petition filed by RNRL as maintainable and has upheld the powers of the court to modify the scheme and make it workable,” he said.
Ambani said the apex court has also acknowledged that the June 18, 2005 MoU was basis for the business reorganisation of RIL.

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