Mumbai: India's billionaire Ambani brothers face off in the country's top court this week over a gas pricing case with all guns blazing: lined on each side are a battery of India's highest paid legal brains.
The Supreme Court will on Tuesday start hearing arguments in the case between Reliance Industries, headed by Mukesh Ambani, and Reliance Natural Resources, led by Anil Ambani, over a deal to sell gas to RNRL at below-market rates as per a family settlement.
This is not the first time the brothers, sons of legendary businessman Dhirubhai Ambani, have fought over business interests that span oil and gas, retail, telecoms, entertainment, financial services and infrastructure since a 2005 settlement brokered by their mother Kokilaben.
Two years ago, talks between Anil's Reliance Communications and South Africa's MTN Group to create a top-10 global telecoms firm were scuppered by Mukesh's claim to a right of first refusal on the Indian mobile firm's shares.
The brothers played joint hosts at a recent 75th birthday party for their mother, raising hopes they may bury the hatchet. Top Government officials and a lower court have suggested they go back to their mother to resolve the gas dispute.
But the row over gas pricing, which analysts say highlights India's uncertain regulatory environment, has prompted a near-daily barrage of words, including an outburst by Anil at a shareholders' meeting, and newspaper advertisements accusing the petroleum ministry of favouring Reliance Industries.
Anil has unexpectedly offered to reconcile with Mukesh and resolve their differences, but Reliance Industries has argued the row goes beyond a mere family squabble.
Analysts say the court must also take a broader view of the Ambani settlement of 2005, which was never made public.
"Who knows what else is in there? This kind of fighting is very damaging to shareholders; they have a right to know the risks," said Arun Kejriwal, director at research firm KRIS.
WHAT'S AT STAKE?
The gas, which Reliance Natural wants at almost half the Government-set rate of $4.2 per million metric British thermal unit (mmBtu), comes from the vast Krishna Godavari basin off India's east coast that is operated by Reliance Industries.
The field is the country's biggest gas find and is expected to nearly double India's gas output when production is at full throttle at 80 mmscmd.
Energy-hungry India, which wants to reduce its dependence on foreign oil and become a new frontier for oil and gas exploration, has showcased the discovery in the KG basin to attract foreign investors.
But analysts worry the Ambani dispute is putting off foreign investors, with possible Government interference in the pricing and marketing of gas raising investment risk in a politically sensitive resource.
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