Ambani Gas row: SC favours Mukesh
A three-judge Supreme Court bench, headed by Chief Justice K G Balakrishnan who demits office on Tuesday, favoured Mukesh Ambani in the high voltage gas pricing and supply dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL).
Chief Justice supported Sathasivam's judegement. Justice Sathasivam said that the brothers need to re-noegtiate the MoU in six weeks as the family MoU was not binding. It added that gas was a national asset and the government will finally decide on the pricing. However Justice Reddy disagreed with the judgement.
The case is one of India's biggest corporate battles. RIL had appealed to the apex court after the Bombay High Court ruled in favour of RNRL.
Sathasivam in his verdict said RNRL is entitled to get 28 million cubic meters a day from RIL's eastern offshore KG-D6 fields at $2.34 per mmBtu, a price 44% lower than government-approved rates.
The case involves terms of a deal under which Reliance Industries was to supply Anil Ambani's Reliance Natural with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price.
Stock market participants expected a repeat of the Bombay High Court judgment, which asked Reliance to supply gas to RNRL at $2.34 per unit.
Case Timeline
The gas, which Reliance Natural wants at almost half the government-set rate of $4.2 per million metric British thermal unit (mmBtu), comes from the Krishna Godavari basin off India's east coast, which is operated by Reliance Industries.
Also read: What does Ambani gas row ruling mean?
The field is India's biggest gas find and should nearly double the nation's gas output when production is at full throttle at 80 mmscmd.
The disputed deal was part of a 2005 family settlement between the Ambani brothers under which the Reliance empire was split following the death of their father. The brothers have been in several disputes since then.
Also Read: What has the Reliance gas dispute been all about?
Reliance Industries argues the private deal cannot take precedence over government policy, which determines who can receive gas and at what price.
Anil Ambani, who claims otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries.
The government initially filed a petition in India's highest court asking to be made a party in the dispute, arguing the family deal was not applicable, and Reliance Industries could only sell gas with its consent.
The government later modified its stance, saying it only wanted to assert that it is the rightful owner of the gas.
Chief Justice supported Sathasivam's judegement. Justice Sathasivam said that the brothers need to re-noegtiate the MoU in six weeks as the family MoU was not binding. It added that gas was a national asset and the government will finally decide on the pricing. However Justice Reddy disagreed with the judgement.
The case is one of India's biggest corporate battles. RIL had appealed to the apex court after the Bombay High Court ruled in favour of RNRL.
Sathasivam in his verdict said RNRL is entitled to get 28 million cubic meters a day from RIL's eastern offshore KG-D6 fields at $2.34 per mmBtu, a price 44% lower than government-approved rates.
The case involves terms of a deal under which Reliance Industries was to supply Anil Ambani's Reliance Natural with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price.
Stock market participants expected a repeat of the Bombay High Court judgment, which asked Reliance to supply gas to RNRL at $2.34 per unit.
Case Timeline
The gas, which Reliance Natural wants at almost half the government-set rate of $4.2 per million metric British thermal unit (mmBtu), comes from the Krishna Godavari basin off India's east coast, which is operated by Reliance Industries.
Also read: What does Ambani gas row ruling mean?
The field is India's biggest gas find and should nearly double the nation's gas output when production is at full throttle at 80 mmscmd.
The disputed deal was part of a 2005 family settlement between the Ambani brothers under which the Reliance empire was split following the death of their father. The brothers have been in several disputes since then.
Also Read: What has the Reliance gas dispute been all about?
Reliance Industries argues the private deal cannot take precedence over government policy, which determines who can receive gas and at what price.
Anil Ambani, who claims otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries.
The government initially filed a petition in India's highest court asking to be made a party in the dispute, arguing the family deal was not applicable, and Reliance Industries could only sell gas with its consent.
The government later modified its stance, saying it only wanted to assert that it is the rightful owner of the gas.
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