RNRL Vs RIL Gas Dispute......Probability of RNRL winning the case is more.

HBJ Capital's suggestion to buy Call option of RNRL depends on the court decision on RNRL-RIL KG Basin Gas dispute....we are here with latest news update and HBJ comments are in BLUE.

RNRL may sell KG gas to third parties, fears RIL
Bs Reporter / Mumbai July 26, 2008, 23:34 IST

Mukesh Ambani controlled Reliance Industries (RIL) fears that gas supplied to Reliance Natural Resources (RNRL), belonging to younger brother Anil Ambani, would be traded to a third party as RNRL does not have a power plant, said Harish Salve, the legal counsel of RIL.

(RNRL is gas trading company, whose plan was to buy gas from RIL @ $2.34 for 17 years and sell it to Reliance Power which will come up in next 3-5 years at $4.2 making 100% profit, now RIL is saying that they fear that RNRL will trade the gas rather then using by itself. In such case Anil might transfer some of the power business to RNRL in order to satisfy their claim, if this happens RNRL will fly and its share will touch the sky).

Appearing before a Bombay High Court division bench comprising Justice J N Patel and K K Tated, Salve said the sale price of $2.34 a million British thermal unit for 28 million cubic metres of gas is not viable and RIL cannot sell it cheap to an ADAG company.

Jethmalani to take on RIL, 26 Jul, 2008, 0000 hrs IST.
MUMBAI: When Ram Jethmalani stands up to argue his case in the Bombay High Court next week, he should find the setting familiar. Call it coincidence or design, the celebrated lawyer has always found himself on the wrong side of Reliance Industries in most corporate battles (All the cases against RIL fought by Jethmalani was won by him, so probability of winning RNRL is more in this case too)

That is set to be repeated, though with a twist. Mr Jethmalani is a counsel for RNRL, part of the Anil Dhirubhai Ambani Group (ADAG), in the legal dispute on gas supplies between it and the Mukesh Ambani-controlled RIL. For the past 30 years, Mr Jethmalani has not taken up any single case for RIL. In fact, in some famous cases, he has fought against it. These include the conversion of G series debentures, and RIL’s efforts to take over engineering giant L&T. Not surprisingly, both sides have deployed some formidable legal artillery before the Bombay High Court.

RNRL is also represented by Mukul Rohatgi, while RIL is represented by Harish Salve. But it’s not that relations between India’s largest private sector company and Mr Jethmalani have always been frosty. Twelve years ago, the late Dhirubhai Ambani had approached Ram Jethmalani to arrange a meeting with his old enemy, Nusli Wadia. Mr Jethmalani then managed an unlikely truce and a high-profile corporate war came to an end. But with Ambani versus Ambani fight, replacing the Ambani-Wadia fight as the leading rivalry in corporate India, the legal heavyweight is at work again.

When asked about the dispute between the Ambani brothers, Mr Jethmalani told ET, “When Dhirubhai expired in 2002, I personally called up both Mukesh and Anil, and advised them not to fight, but within six months both brothers were at each others throat.” And age has certainly not mellowed him. Mr Jethmalani expressed disappointment with Mukesh Ambani’s recent interview to the New York Times. “He (Mukesh) simply transferred all the blame to Anil alleging that he was responsible for all the malpractices about getting critical government and rival corporate information through intelligence agency. This is not done,” he said. In the Ambani vs Ambani case, the proceedings before the Bombay High Court is not likely to be the end of the matter. The losing side is most likely to approach the Supreme Court, said legal advisors from both Ambani Groups.