RIL-RNRL case adjourned till July 26

MUMBAI: The Bombay High Court adjourned hearings in the Reliance Industries-Reliance Natural Resources case to July 26 after the counsel for RNRL made his opening remarks on Thursday. Mukul Rohtagi, representing the Anil Ambani group company, sought changes relating to the limited liability clause in the gas sales agreements signed between the two parties in January 2006.

The liability clause refers to damages to be made by either party in case of a default. As per the January 2006 agreement, RIL will have to pay an amount equal to six months’ fuel supply if they walk out of the agreement. RNRL has opposed this and said that there should not be any cap on the liability. Mr Rohtagi argued that RIL signed three agreements — the non-compete agreement, trade mark agreement and gas sales master agreement — with the demerged companies of the Anil Ambani group, while the management and control of these companies were still with RIL.

These agreements were signed on January 12, 2006, while the management and control of these companies were formally handed over to Anil Ambani Group only on February 7. The agreements were signed with the approval of only RIL’s nominees on the board of RNRL. This was despite specifically expressed strong protest and dissent of JP Chalasani, the sole representative of the Anil Ambani group on the board.

The agreements contain significant, fundamental and material deviations from the agreed position arrived at between Mukesh Ambani and Anil Ambani, as a part of overall reorganisation of the Reliance group, Mr Rohtagi said. The fundamental and materiel deviations are with respect to the effective term, source and security of supply of gas to the company, transportation and swapping rights and most importantly RIL’s liability in case of non-performance, Mr Rohtagi told the court.