RNRL Let Government Step In

Anil Ambani's Reliance Natural Resources Ltd (RNRL), on Tuesday agreed to let the government step into the gas-supply dispute between the Ambani brothers after previously expressing its disapproval.

The Bombay High Court on Tuesday asked the central government to be impleaded in the case between Reliance Industries Ltd (RIL) and RNRL.

The court is likely to pass an order on Wednesday asking the government to file its affidavit in the case.

RIL had stated that the government should also be party to the petition to put forth its stand regarding the pricing of gas. RNRL had, however, opposed it saying the Centre was not connected with the battle.

"Earlier we had opposed it as we thought it was legally incorrect," senior counsel for RNRL Mukul Rohatgi told DNA Money.

"But, in retrospect, we think the government had earlier said that it wanted to be impleaded in the matter. We also don't want to delay the matter so we made a statement that we have no objection to the government being made a party in the matter," Rohatgi said.

He said the orders of the court will be binding on the government as well.

The two companies are fighting over terms of gas supply agreement whereby RIL is to supply gas for RNRL's power generation project at Dadri in Uttar Pradesh.

RNRL has contented that its power project in Dadri was stalled because the Gas Supply Master Agreement (GSMA) was not "bankable".

RIL's counsel Harish Salve had, however, termed RNRL's contention to be "bogus" stating that the Dadri project did not depend on gas from KG basin.

He said the Dadri project was conceived much before the demerger of Reliance and was supposed to get gas from the government.

Salve had also pointed out that the GSMA with RNRL was on the lines of RIL's contract with National Thermal Power Corporation.

Author: Jo Amey