Part of Ambani family agreement made public

Excerpts of the ‘family agreement’ or memorandum of understanding (MoU), which formed the basis of the division of India’s biggest-corporate house, Reliance Industries (RIL), in 2005 was presented to the Bombay High Court . A portion of the copy of the ‘family agreement’ was submitted in the court by Reliance National Resources (RNRL) counsel Ram Jethmalani in the long-pending dispute between RIL and RNRL over the supply of gas from KG Basin and was taken on record by the court. The part of the agreement presented in court relates to gas supply. RNRL is part of the Anil Dhirubhai Ambani Group (ADAG). RIL counsel Harish Salve had earlier trashed the importance of the agreement describing it as a ‘ghost document’. He had said that the RIL board had no knowledge about the agreement and it was only between the warring Ambani brothers. RNRL counsel Ram Jethmalani had argued that senior officials in RIL and RNRL had cited the MoU in internal communications as the basis for demerger of the RIL empire. The division bench of the high court then asked for a copy of the relevant portion of the family agreement between the Ambani brothers. RIL counsel Mr Salve requested the division bench of justices JN Patel and KK Tated, which was hearing the case, that the document may be kept in a sealed cover and not be allowed to be published verbatim by making it available to any third party. Mr Salve argued that it may lead to RIL shareholders claiming that the deal was against the shareholders interest. Mr Salve, in his submission before the court, made two points. He said that the gas was to be supplied to Reliance Energy for the Dadri project and not to RNRL. He also argued that the gas could only be used for power generation and not for trading. RNRL is supposed to transport gas from the KG Basin to the Dadri power plant. He refuted earlier submissions by RNRL that it had the right buy gas from RIL and sell it to other ADAG companies. This was in response to earlier arguments by RNRL that it should be allowed to trade in the KG Basin gas till the Dadri plant became functional. Mr Salve also argued that RIL had never refused to sign a bankable agreement with ADAG. ADAG says it cannot begin construction at Dadri because it does not have an agreement which it can present to bankers. RNRL is expected to submit its reply to the court on Thursday. RNRL counsel Mahesh Jethmalani refused to comment on the arguments made by Mr Salve and said he would respond in court.