RNRL RIL Gas Case Settlement Does Not Seem to End

Posted Aug 28, 2009 by Raju /

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The disputes and legal battles over gas supply contract settlements between RNRL and RIL are not reaching a conclusion. To add to the confusion, the government too entered in the game for its own interests. Sometimes it is Mukesh who feels relief and the other time it is Anil. This RNRL-RIL gas case settlement does not seem to end soon.

RNRL in its full form Reliance Natural Resources Limited, was started by Mr. Anil Dhirubhai Ambani while the other company RIL in its full form Reliance Industries Limited is currently managed by Mukesh Ambani as its major shareholder. These two Ambanis are two brothers born to same father who was a great Industrialist of the country, India. After Dhirubhai Ambani died, all his companies were shared between the two brothers by his wife.

But in between certain issues did not get resolved. To add more masala to that, these two brothers are not like real brothers. They are like arch-enemies. Today they are the top most billionaires of India and with their quarrels they are attracting the attention of the whole country. Something like family matters going into public.

Bombay High Court in December 2005 made a contract between RNRL and RIL such that RIL will supply gas to RNRL uninterruptedly at agreed upon price. RIL found good reserves in KG basin (Krishna-Godavari Basin) in Andhra Pradesh. Later RIL decided not to give the gas to RNRL and the legal battle started again at the same time when KG basin’s resources are about to be used.

Sometime government intervened and said that the KG basin natural reserves are meant for the public and not for some private individual’s personal gain. These two companies (RNRL & RIL) are actually public companies and have their shares heavily traded on the Indian stock exchanges.

This feud resulted in wild fluctuations in shares of both RIL and most of the times in RNRL (as it is a bigger beneficiary than if RIL were a loser). Many a times since 2006, there were new cases filed by one against another about the same gas contract settlement. For a long time high court couldn’t give any settlement but when it did, Mukesh took it to Supreme Court at the center of the nation.

Now when the case went to Supreme Court in Delhi, the central government intervened through Petroleum Ministry (Murli Deora is the minister of Petroleum as representative of government in the disputes). The government was trying to protect its and the general public’s interest with a new unsettled contract that related NTPC (public petroleum corporation).

In the last month its behavior favored Mukesh or RIL side. But now it seems to favor RNRL side. But it does not matter because its ultimate goal is not to protect their interests but its own. RNRL and RIL case may not end up being settled by the time government gets out of the case.

Meanwhile even the Supreme Court could not settle the case in any time. It went on adjourning the case month after month. The latest was for September 1 2009. But even before that date today as of 28 August 2009, there is already news that this case was adjourned to September 4.

Let me tell you one sure thing. The RNRL vs. RIL gas contract case or dispute or legal battle, is not going to end any time soon!