Have legal battles cost Mukesh Ambani & Anil Ambani business groups Rs 28,000 crore in recent past?

Have legal tussles cost the Ambani brothers—Mukesh Ambani and Anil Ambani—Rs 28,000 crore in the recent past?

Within the last one year, Reliance Infrastructure—part of the business group led by the younger brother, Anil—take a hit of Rs 8,000 crore after  a court overturned a previous ruling in its favour. And this month, Reliance Industries—led by Mukesh—was reportedly ordered to pay Rs 20,000 crore after a double judge bench declared an arbitration award in favour of the company as “bad in law”. So, all in all, the two developments have indeed cost the brothers amounts to the tune of Rs 28,000 crore. However, they lead their own, separate businesses.

Let look at these developments in detail.

RIL vs ONGC

PSU energy giant Oil and Natural Gas Corporation (ONGC) reportedly won a long standing court case against RIL in the Delhi High Court on February 14. The matter relates to a gas dispute between RIL and ONGC that dates back to 2018 over the production from the private sector company’s KG-D6  offshore gas fields, wherein ONGC alleged that RIL extracted natural gas from its rightful reserves in adjacent fields without permission between 2009 and 2013, costing the state-run firm thousands of crores worth of produce.

According to the February 14 ruling, ONGC is entitled to recover a sum between Rs 20,000 crore and Rs 25,000 crore including interest from RIL. 

Initially, RIL won a single-judge ruling in its favour in the case. However, a division bench—comprising Justice Rekha Palli and Justice Saurabh Banerjee—overturned that ruling, declaring the arbitral award as “bad in law”.

The division bench found “patent illegality” in the arbitral award, finding sufficient grounds to interfere with the earlier decision under Section 37 of the Arbitration and Conciliation Act. 

The central government had accused RIL and its foreign partners, UK-based BP and Canada-based Niko Resources, of committing an “insidious fraud” and “unjust enrichment of over $1.729 billion” by siphoning gas from the deposits the company had no right to exploit.

"We are setting aside the impugned order of May 9, 2023, passed by the single judge, and the arbitral award passed by the arbitral tribunal on July 24, 2018, as they are contrary to the settled position of law," read the ruling by the division bench in the matter.

A day after the division bench ruled in favour of ONGC, RIL issued a statement to its shareholders, stating that after analysing the judgment, it would file an appeal before the Supreme Court.

Reliance Infra unit vs DMRC

In April 2024, the Supreme Court set aside an arbitration award involving Rs 8,000 crore in favour of Delhi Airport Metro Express, a subsidiary of Reliance Infrastructure.

The court's ruling brought a relief to Delhi Metro Rail Corporation (DMRC), which had already paid Rs 3,300 crore to the Reliance Infrastructure arm.