Ambani family MoU before demerger not binding on RIL: HC told
Anil Ambani's RNRL is locked in a legal dispute over the terms of GSMA with RIL, controlled by his elder brother Mukesh. Decade's hottest biz feuds
By PTI |
MUMBAI: The Memorandum of Understanding (MoU) among Ambani family matriarch Kokilaben, her sons Mukesh and Anil Ambani prior to the split in the Reliance Group is not binding on RIL, its counsel told the Bombay High Court on Tuesday.
Harish Salve, arguing for Reliance Industries Ltd in the dispute between RIL and RNRL, contested the lower court's observation that the gas purchase master agreement (GSMA) between the two should be in line with MoU signed by the brothers and their mother in 2005.
Anil Ambani's RNRL is locked in a legal dispute over the terms of GSMA with RIL, controlled by his elder brother Mukesh. By the disputed GSMA, RIL agrees to supply gas to RNRL for latter's power-generation projects.
When the matter came up before a single judge of the High Court last year, RNRL contended that MoU had spelt out details of GSMA, but the GSMA that was finally offered by RIL was not a "bankable agreement", as there was no certainty of tenure, price and quantity of gas to be supplied.
After failing to do so, both parties filed appeals before a division bench.
Arguing for RIL, Salve said, "There was no private MoU which is binding on the board of directors of RIL."
Salve also said that MoU, though relied upon by RNRL, was never produced before the court.
"Even if we assume that RIL directors were aware of existence of MoU, it was not binding on them," Salve said.
RNRL, on the other hand, had taken a stand that the MoU must be considered in working out the terms of the GSMA.
According to the original GSMA, now in dispute, RNRL is to get 28 MMSCMD of gas from RIL's recently discovered gas in the Krishna Godavari basin for its proposed plants.
But RNRL wants certainty of quantity, a tenure of 17 years and fixed price.
RIL, however, contends that these factors cannot be determined in advance.
The argument, before the Division Bench of Justices J N Patel and K K Tated, will continue on August 7.
Harish Salve, arguing for Reliance Industries Ltd in the dispute between RIL and RNRL, contested the lower court's observation that the gas purchase master agreement (GSMA) between the two should be in line with MoU signed by the brothers and their mother in 2005.
Anil Ambani's RNRL is locked in a legal dispute over the terms of GSMA with RIL, controlled by his elder brother Mukesh. By the disputed GSMA, RIL agrees to supply gas to RNRL for latter's power-generation projects.
When the matter came up before a single judge of the High Court last year, RNRL contended that MoU had spelt out details of GSMA, but the GSMA that was finally offered by RIL was not a "bankable agreement", as there was no certainty of tenure, price and quantity of gas to be supplied.
After failing to do so, both parties filed appeals before a division bench.
ADVERTISEMENT
Arguing for RIL, Salve said, "There was no private MoU which is binding on the board of directors of RIL."
Salve also said that MoU, though relied upon by RNRL, was never produced before the court.
"Even if we assume that RIL directors were aware of existence of MoU, it was not binding on them," Salve said.
RNRL, on the other hand, had taken a stand that the MoU must be considered in working out the terms of the GSMA.
ADVERTISEMENT
According to the original GSMA, now in dispute, RNRL is to get 28 MMSCMD of gas from RIL's recently discovered gas in the Krishna Godavari basin for its proposed plants.
But RNRL wants certainty of quantity, a tenure of 17 years and fixed price.
ADVERTISEMENT
RIL, however, contends that these factors cannot be determined in advance.
The argument, before the Division Bench of Justices J N Patel and K K Tated, will continue on August 7.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
