Reliance rejects NTPC concern over Mumbai court case

Vol 13, PW 4 (30 Jul 09) Midstream & Downstream

Reliance is discounting as â€کsuperfluous’ concerns at NTPC that any agreement for D6 gascould â€کprejudice’ its legal case in the Mumbai High Court.

Last week The Economic Times quoting an unnamed NTPC source re-affirmed that agreement has been reached with Reliance on most issues for 2.67m cm/d gas but that, “this supply should be â€کwithout prejudice’ to our rights and contentions in the court case,â€‌ and that, “Reliance is reluctant to give a written undertaking in this regard.â€‌ Sounding the alarm, the anonymous NTPC source warned that Reliance’s unwillingness to accept a â€کwithout prejudice’ clause would, “further delay the processâ€‌ of signing a contract.

â€‌ Contacted by this report, a well-placed Reliance source is surprised at NTPC’s position. “If NTPC wants this clause inserted in the agreement then why is it signing the agreement at allâ€‌ he asks.

To stress the point, our Reliance source points to the legal battle underway with Anil Ambani-controlled Reliance for the much larger disputed quantity of 28m cm/d D6 gas. Despite this, says Reliance, the Anil Ambani group has signed a GSA for 190,000 cm/d D6 gas to its 220-MW power station at Samalkot in Andhra Pradesh.

In April the government allocated Samalkot 190,000 cm/d of D6 gas; a GSA was signed in May and supplies have begun. Most important, says Reliance, NTPC is overlooking that the proposed agreement already contains a clause with reference to the two court cases with NTPC and Anil Ambani-controlled Reliance.

“We have signed 40 agreements for D6 gas and all of them contain this clause,â€‌ adds Reliance. “The additional clause NTPC wants is superfluous.

â€‌ Reliance also stresses that one of its agreements is with Ratnagiri Gas, part owned by NTPC! “We are signing these agreements on government orders with regard to price, quantity, term of supply and customer,â€‌ says Reliance. “We have no freedom in this matter and NTPC should know this.