The Hindu Business Line : Ambanis’ accord binding on group cos: HC

The Bombay High Court on Monday ruled that the family settlement within the Ambani family and the subsequent restructuring of Reliance Industries sanctioned by the court are binding on the respective group companies.

The ruling effectively grants to the Anil Ambani-led Reliance Energy and the associate company Reliance Power, which would be executing the Dadri project, access to the committed quantity of gas and the price of $2.34 per MBTU (a standard unit of supply) then agreed in the family settlement.

The court also directed the Ambani brothers to enter into a fresh gas supply agreement on all pending issues of supply within the overall terms of the family settlement and the subsequent scheme of arrangement involving Reliance Industries for the KG basin gas fields.

The court set a time limit of 120 days to Reliance Natural Resources Ltd (RNRL) and Reliance Industries for concluding the gas sale master agreement (GSMA).

The interim order issued by the court earlier preventing RIL from selling the KG basin gas to a third party continues.

Counsel for RNRL, Ms Manali Singhal, said that the GSMA involving RNRL when it was part of the undivided Reliance Group was one sided and, therefore, not suitable and bankable.

The parties have been ordered to draw a fresh agreement, which should be in line with the memorandum of understanding (family settlement), which exist between two parties, Ms Singhal told newspersons later.

The court observed that GSMA, which was signed in January 12, 2006, is in breach of the scheme of demerger.

The scheme split the Ambani empire between the two brothers.

Industry sources said that in the next four months both parties may sort out major issues of the GSMA, which would include whether the pact should have a limited or unlimited liability.

If RIL is unhappy with the single court order, it can approach a division bench of the Bombay High Court.