The Gujarat High Court has ruled that Reliance Industries need not pay GAIL transmission charges for gas it moved through its own pipelines. Justice Nirzar S Desai struck down the clauses in two contracts, from 2000 and 2008, The Indian Express reported. In his view, they were “unfair, arbitrary, and against public policy”.
What the Reliance GAIL ruling says
The dispute covers gas that GAIL supplied to Reliance’s petrochemical complex at Dahej in Gujarat. Reliance built two pipelines of about 35.4 km each, 70.08 km in total, between GAIL’s Gandhar plant and Dahej. Even so, GAIL charged it for transmission. Reliance asked for waivers, but GAIL refused both times.
According to the court, Reliance had little choice but to accept the terms because of GAIL’s dominant position. It called GAIL’s defence “nothing but an eye-wash”.
Refund and interest
Consequently, GAIL must refund the charges for the legally permitted period. That period starts three years before Reliance filed its petition in 2010, LawLens reported. GAIL must also pay simple interest of 8% a year. However, the court turned down Reliance’s request for 18%.
The judge ruled on 16 October, and the court released the judgment on Thursday.
For more on Reliance, read our report on its talks with the US at Jamnagar.
