A dispute between two of India's most powerful businessmen inches closer to resolution as the country's top court begins hearings next week on a dispute over terms of a gas supply pact. The high-profile spat between the billionaire Ambani brothers has unnerved investors and raised concerns about the influence of powerful family businesses in India. Who are the Ambani brothers? Elder sibling Mukesh Ambani is Asia's richest man, whose worth was pegged at $19.5 billion by Forbes magazine earlier this year. He controls India's largest listed firm, Reliance Industries, which has interests in the oil and gas exploration, petrochemicals, infrastructure and retail sectors. Anil Ambani, worth an estimated $10.1 billion, received the telecoms, power, entertainment and financial services interests of the Reliance empire after it was split in 2005 following the death of the brothers' father, Dhirubhai Ambani, who built Reliance from scratch. The Anil Dhirubhai Ambani Group includes India's No. 2 telecoms firm, Reliance Communications and Reliance Infrastructure. What's the fight about? The brothers have been involved in several spats since the Reliance group's split. Before this Mukesh was chairman and managing director of Reliance Industries and Anil vice-chairman. The latest dispute involves a deal by Reliance Industries to supply Anil Ambani-led Reliance Natural Resources with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price. The deal was part of the 2005 family settlement, brokered by their mother Kokilaben. Reliance Industries argues the private agreement cannot take precedence over government policy, which determines who can receive gas and at what price. Anil, who claims otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries. In a surprise move on Sunday, Anil held out an olive branch to Mukesh to resolve their differences, but analysts say this will not have an impact on the court battle. 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. How is the government involved? The government initially filed a petition in India's highest court asking to be made a party in the dispute, arguing the family agreement between the brothers was not applicable, and Reliance Industries could only sell gas with its consent. The government later modified its stance, saying it only wanted to assert that it is the rightful owner of the gas. The government also said its policy on pricing and marketing of gas did not apply to pre-existing contracts such as one between Reliance Industries and state utility NTPC Ltd, a point which may be used by Reliance Natural to strengthen its case. Anil Ambani has said the petroleum ministry's efforts to control the pricing and sale of gas was the reason for the poor response to the government's global auction of oil and gas exploration blocks this week. How is the law involved? India's highest court will hear the case between the brothers on Oct. 20. In a brief hearing on July 20, it did not exclude the government from the case. The Ambanis have appealed a decision by the Bombay High Court – a lower legal authority – which directed the brothers to reach a suitable agreement over gas supplies. Anil wants the Supreme Court to direct Reliance Industries to supply his company with the gas on the earlier-agreed terms, while Reliance Industries argues the private agreement signed by Mukesh is not binding on the company. A verdict is not expected on Oct. 20, and the case could stretch for weeks, months or even years, analysts have said. The chief justice of India, K.G. Balakrishnan, along with two other judges, will hear the case. Impact on share prices? Analysts see Reliance Industries, which has a market value of $74 billion, gaining about 6 percent if the court rules in its favor, while the stock may fall 5 percent on an unfavorable ruling. The stock has risen about 77 percent so far this year, in line with the main index. Reliance Natural shares could soar 40 percent if the ruling goes in its favour, and could slide 13 percent or more if the verdict is against the company, market watchers said.
