Supreme Court : RIL v/s RNRL is Ram Jethmalani v/s Harish Salve

There were 48 TV Crews at the Supreme Court this morning…..The Cameras were positioned to broadcast live sound bytes from the lawyers of RIL and RNRL

First we had a trifle agitated, Ram Jethmalani,who represented RNRL, emerging and a hectic rush to have  Mikes thrust onto him for his comments

This is what Jethmalani said,rather accused 

” The Supreme Court has not stayed the High Court Order which had favoured RNRL.The Government is a Puppet of RIL and The Oil Ministry is in the pocket of Mukesh Ambani….according to me they (RIL) cannot deal with the Gas…They (Mukesh Ambani and RIL) can go against Moral Issues and Mother’s Mandate….It is a stupid argument ( that the MOU cannot override Sovereign Interest).In a democracy and a republic there are no sovereign authorities..all authorities are bound by a court of law ” 

Then came out a beaming Harish Salve,who stood for RIL.This is his interesting sound byte

” The Supreme Court has not passed any order today.On specific mention that RIL will continue distribution of Gas as per the January 2009 Agreement,the Court stated “We are not stopping you”….The Question is that in these changed circumstances,when Gas is selling at US $ 4.20/mmbtu ,how can one buyer insist at US $ 2.34/mmbtu…the question thus arises that how can the MOU between two brothers,to strike parity between them, override the Sovereign Policy and Interests of the Government….Supreme Court is concerned with the seriousness of this Issue……It has issued Notice to RNRL as to why the Government should not be made a part of this Case…..Jethmalani’s utterances are largely for the Galleries and not for the Courts…..MOU was subject to company and government approvals,which is being ignored….If the gas is sold at US $ 2.34,it would be a double whammy as the buyer will then sell it for US $ 4.20 and pocket the difference ! ( RNRL was to supply the Gas to Reliance Power’s Dadri Plant.This Plant will take atleast 3 years to beging Operations…so if the MOU was to be honoured,it would get Gas at US $ 2.34 and will be able to sell it at current commercial rates of US  $4.20 and pocket the difference ) When cases become weak you thump the table…This (Anil Ambani’s July 15,2009 letter to the PM) is table thumping”

On a day when the Sensex has surged to 15100 over 350 points,RNRL is down 3 % a Rs 80 while RIL is up 4% past Rs 2000,just past 2 pm

Anil Ambani has shot of a letter on July 15,2009 to the Prime Minister on this Dispute clarifying that his group ADAG is is no way attemting to disrupt Gas Supplies…but the Government should act in national and Public Interest…something it is not doing currently…letter also accuses RIL and Oil Ministry of colluding

Government’s stance,as asserted by the R S Pandey,the Oil Secretary ( and this clearly favours RIL) is that the Discovered Gas in the KG basin is the Property of the Government and that RIL is merely a Contractor.Therefore any MOU signed between the Ambani Brothers on this gas should be declared Null and Void as RIL has no authority to enter into this MOU.The Ambani Brothers cannot make the Gas their Private Property.The MOU ,which earlier was a private document,has now revealed that the Brothers had decided a Gas sharing ratio of 60:40 and two buyers NTPC and RNRL.The Government would have to be at the mercy of the Ambani Brothers on such an important National Resource….It would set a bad precedent and all contractors would enter into such agreements….The Government’s Production Allocation and Pricing Policy would then have no relevance….Thus acting on Legal Advice,the Government has filed an application in the court to be made a part of this case between RIL and RNRL. The Government will decide how to prioritise and allocate all the discovered Gas.It has already rolled out the priority to Fertiliser and Power Plants and RIL has already signed Gas Sales Agreements (GSAs) with several PSUs and Pvt Companies for the gas …It’s already producing 40 mmtu gas daily and is poistioned to do 80 mmtu by September 2009

The Next date of Hearing in the Supreme Court is on September 1,1009

Expect the Fireworks to continue between the warring brothers and their Groups…This Battle may have been won by RIL but the War is still on !….All this is impacting Volatility in Shares Prices of RIL and RNRL on the bourses

One thought on “Supreme Court : RIL v/s RNRL is Ram Jethmalani v/s Harish Salve

  1. If the gas is available to RNRL at lower gas price i.e US$2.34 per mmbtu as against a price of US$4.2 per mmbtu which was the EGoM (Empowered Group of Ministers) decided price, RNRL will not only alone reap benefits from the supply of gas but also Reliance power an ADAG group company, which is waiting for gas for its gas based plant.

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