Reliance Gas Deal Dispute Takes Ambani Brothers to Court

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It's a deal that rocked corporate India in 2009; bringing the Ambani Brothers vis-à-vis, though in Court. The raging dispute between Mukesh and Anil Ambani over the supply and pricing of natural gas from the Krishna Godavari basin took the two brothers to the Supreme Court.

The dispute started when questions were raised over the validity of the deal between the two brothers, negotiated by their mother Kokilaben at the time of splitting Reliance empire a few years back. The point of disagreement was over the price of gas, where government too claimed a share.

The Reliance Industries, led by Mukesh Ambani owns the fields off the Andhra Pradesh Coast. It's also amongst the biggest discoveries made in Asia. But Anil Ambani demanded a part of the gas to be used in the power plants of his company. Ministry of Petroleum and Natural Gas raised questions overt the price that Anil Ambani offered for the gas as the prices of hydrocarbon have become more than double than the then price when the deal was made in 2005.

The government formed a committee under Pranab Mukherjee, the present Finance Minister to look into the matter. The committee recommended that the price should be $4.21 per unit. In June 2009, the Bombay High Court directed Reliance Industries (owned by Mukesh Ambani) to supply 28 million units of gas to Reliance Natural Resources (owned by Anil Ambani) for a period of 17 years at the price of $2.34 per unit after allotting 12 million units to National Thermal Power Corp, a state-run establishment.

Reliance Industries challenged this verdict to go to the Supreme Court. The Ministry of Petroleum, though joined the dispute as the part owner of the gas, demanded the family deal to be declared null and void.

Even months after it started, the dispute continues to remain and is yet to be resolved. Recently a Parliamentary Panel has asked the government to resolve the dispute and take necessary actions for the same.