Modi isn’t soft on Ambanis: Corporate Espionage investigation is the proof

Ambani-Modi bond may be the talking point in Indian politics yet the BJP-led government in centre isn’t letting Reliance India Limited (RIL) take undue advantage in the corporate espionage case that shook the media just before the March budget. As per a news report by The Economic Times, the government has argued that allocation and pricing of a natural resource, which the government holds as a trustee of the people cannot be the subject matter of an internal arbitration.

In an affidavit submitted to the Supreme Court, the Ministry of Petroleum & Natural Gas has instead asked the court to throw out RIL's petition to appoint a third arbitrator of independent nationality to decide on the pricing of natural gas.

As per the financial daily, the affidavit by the Modi government seems to reflect a hardening of stance as this is first occasion that the government has said the dispute cannot be resolved by arbitration.

RIL had appointed Sir David Steel as its nominee on the arbitration panel, while the government had appointed GS Singhvi, former Supreme Court judge, as its representative. The company subsequently asked the apex court to appoint the third arbitrator.

In its affidavit, the government has also said that if the matter was to be decided by arbitration then it has to be under Indian laws and the third arbitrator has to be an Indian citizen, a demand that RIL has staunchly resisted, through its reply filed through Parekh & Co.

Senior advocate Harish N Salve is representing RIL in court. RIL had demanded that the prices be increased from $ 4.2 mmbtu to $8.4 mmbtu during the UPA regime as per a formula fixed by a committee headed by C Rangarajan, economic advisor to the prime minister. The price $8.4 per MMBTU(Million British Thermal Units) was notified on January 14, 2014 and was to be applicable from April 1, 2014. This was later deferred in view of the elections in May.

However, after the new government came in, fresh guidelines came into effect from November 1, 2014. Under these guidelines the price was increased to $ 5.61 mmbtu. The government said the October 2014 guidelines would apply prospectively and uniformly to all sectors of the economy and allocation would also be as per the revised gas utilisation policy.
"... implementation of such government notified guidelines cannot be a subject matter of a private arbitration," the affidavit said. "The role of the respondent as the executive is to lay down policies and guidelines, which would best protect the interests of the public and are actions which ought not to be made subject to private arbitration proceedings."

"Any challenge if at all will essentially have to be made before the appropriate courts of India as the same shall have a bearing on the public at large...," it said.

"The role of the executive of the union in framing policies for an entire sector of entities and the public at large cannot be challenged and decided under a private challenge and decided under a private contract which the (respondent - ministry) has entered into with a private party for the purposes of exploration, extraction and exploitation of natural resources.

The government also accused RIL of demanding implementation of the pricing of January 2014, under the threat of arbitration proceedings which was "mala fide".

RIL in its affidavit claimed that it had always acted in consonance of government policies and fulfilled all its obligations under the production sharing arrangement. It had never used gas as its private property, it said. It had never allocated any gas to its own petrochemical plants and refineries, the company said.

RIL denied the suggestion that it had attempted to hold the national economy hostage to its benevolence.

(Image: Reuters)