RIL, RNRL slide as court case on gas dispute postponed

Reliance Industries was down 0.32% to Rs 2657.10 and Reliance Natural Resources fell 1.48% to Rs 119.70 at 12:40 IST on BSE after the long-pending dispute between the two firms over gas sales was postponed to 22 July 2008.

Due to postponement of the case, Reliance Industries (RIL) will not be able to firm up sales contracts before July 2008, reports suggest. The commercial production of gas from RIL's Krishna Godavari basin is likely to begin in July 2008.

The two Ambani brothers are litigating for the past one year over agreement whereby RIL will be supplying gas to Reliance Natural Resources (RNRL), as a part of Reliance demerger deal, for the latter's power project at Dadri in Uttar Pradesh

Last may, Justice A M Khavilkar of the Bombay High Court restrained RIL from creating `third party interests' with regard to 40 MMSCMD of natural gas from KG basins -- which RNRL is claiming under the agreement in question.

The main issue is terms of gas supply master agreement (GSMA) between the two: RNRL says that present GSMA is vague and doesn't fix tenure, price or quantity of gas to be supplied.

Last October, another judge of the High Court asked both parties to try and renegotiate the GSMA, but it did not work out and now the case is before division bench of Chief Justice Swatanter Kumar and V M Kanade.

The Mukesh Ambani led Reliance Industries had outperformed the market over the past one month till 5 May 2008, gaining 14.79% compared to the Sensex’s return of 14%. It had also outperformed the market in the past one quarter, rising 1.90% compared to Sensex’s decline of 6.28%.

The Anil Ambani led Reliance Natural Resources (RNRL) had outperformed the market over the past one month till 5 May 2008, advancing 27.36% compared to the Sensex’s return of 14%. However it underperformed the market in the past one quarter, declining 21.08% compared to Sensex’s decline of 6.28%.