Reliance Industries on Tuesday told the Supreme Court that it would lose money by selling natural gas at $2.34 per million British thermal units or mmBtu.
The company’s lawyer Harish Salve told the court that RIL had not told the Bombay HC that sale at $2.34 per unit would be profitable and that the HC appeared to have misunderstood the matter.
The hearing before India’s apex court was also marked by interjections by the justices. The judges observed that the natural gas belongs to the government and all contracts on sharing of gas are subject to the government’s approval. The court also said that it may issue a direction to the two feuding companies, RIL and RNRL, to arrive at a suitable arrangement. "Gas belongs to the government. Gas is national property," said a three judge bench headed by Chief Justice KG Balakrishnan. CJI, Justice Balakrishnan speaking for the bench observed, 'all contracts are subject to it (government’s ownership concept over gas)."
In the initial stages of court proceedings on Tuesday Salve explained the difficulty on arriving at an agreement with RNRL on supply of gas zeroing in on various aspects of the MoU, demerger and government’s gas utilization policy.
Salve said a contract between both the parties cannot be arrived at by using the agreement with NTPC as a template. The court then said, "There must be some parameters to arrive at a suitable agreement."
Justice Raveendran speaking for the bench remarked, "What power is available to the court, if there is no suitable agreement. We will do two things. We will direct you to arrive at a suitable agreement or refer the issue to an arbitrator to pass an award."
Salve, however said, any agreement between RIL and RNRL could be on the basis of the government’s gas utilization policy. The MoU could not be a basis for arriving of a suitable agreement, Salve said. RIL’s counsel will continue his arguments on Wednesday.
Source: http://economictimes.indiatimes.com
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The company’s lawyer Harish Salve told the court that RIL had not told the Bombay HC that sale at $2.34 per unit would be profitable and that the HC appeared to have misunderstood the matter.
The hearing before India’s apex court was also marked by interjections by the justices. The judges observed that the natural gas belongs to the government and all contracts on sharing of gas are subject to the government’s approval. The court also said that it may issue a direction to the two feuding companies, RIL and RNRL, to arrive at a suitable arrangement. "Gas belongs to the government. Gas is national property," said a three judge bench headed by Chief Justice KG Balakrishnan. CJI, Justice Balakrishnan speaking for the bench observed, 'all contracts are subject to it (government’s ownership concept over gas)."
In the initial stages of court proceedings on Tuesday Salve explained the difficulty on arriving at an agreement with RNRL on supply of gas zeroing in on various aspects of the MoU, demerger and government’s gas utilization policy.
Salve said a contract between both the parties cannot be arrived at by using the agreement with NTPC as a template. The court then said, "There must be some parameters to arrive at a suitable agreement."
Justice Raveendran speaking for the bench remarked, "What power is available to the court, if there is no suitable agreement. We will do two things. We will direct you to arrive at a suitable agreement or refer the issue to an arbitrator to pass an award."
Salve, however said, any agreement between RIL and RNRL could be on the basis of the government’s gas utilization policy. The MoU could not be a basis for arriving of a suitable agreement, Salve said. RIL’s counsel will continue his arguments on Wednesday.
Source: http://economictimes.indiatimes.com
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