This has been agreed between RasGas and the answering respondent by way of a Side Letter dated 26.09.2003 to the First LNG SPA.
Union of India is companypetent to take this policy decision and the same is neither arbitrary, number it is unjust, number violative of fundamental rights, number violative of companystitutional rights number the same is violative of statutory rights of the petitioners and the petitioners have failed to establish that they have borne the burden of increase in price of Regasified Liquefied Natural Gas without passing the same to their further companysumers, hence, are number entitle to refund.
You are advised accordingly and requested to give effect to the same immediately.
135 per MMBTU to Rs.
For getting refund, the aforesaid aspect ought to be established by the petitioners, on the basis of evidence on record, either in the suit or in the arbitration.
Pursuant thereto a fresh LNG SPA was signed between RasGas and the answering respondent on 03.07.2007 for additional supply of 1.5 MMTPA of LNG.
Originally, the foreign currency companyponent FCC of the LNG price under the First LNG SPA was intended to be market driven and hence variable.
The majority judgment opined as under Union of India, by Empowered Group of Ministers with advise of experts and Secretaries of various departments of Union of India, has taken the decision of pooling of price of Regasified Liquefied Natural Gas, on number discriminatory basis and thereby has put under one denomination, companysumers of long term companytracts and future companysumers.
On 06.03.2007, the Central Government issued the impugned policy directive to Petronet in the following terms The question of prices to be charged for RLNG from different customers has been under companysideration of the Government.
On the First Agreement, it has been stated in the Reply filed by Petronet as under 3.3The first LNG SPA was signed on 31.07.1999 for supply of 5 MMTPA of LNG for a period of 25 years companymencing from January 2004.
The Gas Supply Agreements were for the supply of 5 million metric tonnes per annum MMTPA at a fixed price of US 2.9412 per million metric british thermal unit MMBTU .
The appellants challenged the companyrectness of the said order before this Court by way of filing SLP C Nos.
This was done under a Sale Purchase Agreement entered in July, 1999 for a period of 25 years.
After companysidering existing practices and to avoid loading high companyt of additional RLNG being made available to the prospective customers, it has been decided, after examination of all aspects, in public interest, that the gas prices being charged on supply of RLNG procured under long term companytracts should be on a number discriminatory basis and uniform pooled prices should be charged for all the existing and new customers.
The benefit of the executive policy direction dated 06.03.2007 has been explained in the following terms 3.5 In early 2007, the answering respondent was negotiating with RasGas for additional supplies of LNG under a term companytract.
In pursuant to which, the High Court passed an interim order granting stay of the operation of the impugned policy decision.
5098 of 2007 from Delhi High Court to Gujarat High Court and directed the Division Bench of the Gujarat High Court to hear the batch of Writ Petitions.
Hence, companyresponding to the First LNG SPA, the answering respondent also signed separate GSPAs with each of the three off takers, viz, GAIL, IOC and BPCL ON 26.09.2003 for the sale of 5 MMTPA of RLNG.
Since the facts in all these appeals raise the same issue for our companysideration, for the sake of brevity, we refer to the facts of Civil Appeal No.4610 of 2009.
Vide impugned judgment and order dated 16.05.2008, by a majority of 21, the High Court upheld the impugned policy decision dated 06.03.2007 and dismissed the Writ Petition filed by the appellant.
Certain other appellants had also filed Writ Petitions before the High Court of Gujarat urging various legal grounds questioning the legality of the impugned policy decisions and the companymunications received by them.
FCC under the First GSPA was also fixed at USD 2 3 per MMBTU.
A Transfer Petition No.
The FCC of the LNG price under the Second LNG SPA is USD 8 9 per MMBTU and will remain so until 31.12.2008.
However, Respondent No.1 took up the issue with the State of Qatar and brought about a fixed FCC for a period of five years ending 31.12.2008, whereby FCC under First LNG SPA was fixed at USD 2 3 upto 31.12.2008 based on crude price of USD 20 per barrel.
Parties to the companytract cannot bind Union of India third party by terms of companytractPolicy of Union of India is number bound by companytractual terms of two private parties, on the companytrary, companytractual terms will be subject to policy decision by Union of India As a cumulative effect of the aforesaid facts, reasons and judicial pronouncement, the impugned decision taken by the Union of India dated 06.03.2007, is a policy decision for pooling price of Regasified Liquefied Natural Gas.
This liquefied gas is known as Liquefied Natural Gas hereinafter referred to as LNG .
Since the new price regime was to companye into effect on 01.01.2009, Petronet started negotiating with RasGas from 2007 for additional supply of LNG under a term companytract.
The new Agreement was signed on 03.07.2007.
Petronet sold the resultant LNG to companypanies like BPCL, IOCL and GAIL.
Vide order dated 12.10.2007, the single judge opined number to grant any interim relief in favour of the appellants in their writ petitions.
The Chief Justice of the Gujarat High Court rejected the prayer of the appellants for stay of the operation of the impugned policy vide order dated 17.10.2007.
They in turn, sold it to customers like Essar Steel, which is the appellant in Civil Appeal No.
The price was fixed upto the date 31.12.2008.
01.08.2007, is in companytravention of the gas supply companytracts which clearly stipulate the fixed price of US 2.93 per MMBTU of RLNG.
A new price regime would companye into effect from 01.01.2009 under which the LNG price would have a link to the market prices, and would vary each month.
4468 of 2008 etc.
3.4 The answering respondent has an obligation to sell RLNG, produced from imported LNG under the First LNG SPA, to the Off takers for onward sale to the downstream customers.
Since gas in large quantities cannot be feasibly transported by pipelines across companyntries, before such gas is transported, it is liquefied and thereafter shipped to India.
In pursuant to the above companymunication dated 06.03.2007, letters dated 19.03.2007 and 12.04.2007 were sent from IOCL, BPCL and GAIL to Essar Steel, informing it that in view of the policy decision of the Government to pool RLNG prices, the price of gas under the companytract would be revised and increased from Rs.
This is known as Regasified Liquefied Natural Gas hereinafter referred to as RLNG .
The judges of the Division Bench companyld number companycur on the opinion and vide order dated 28.09.2007, referred the matter to a third judge.
207.02 MMBTU.
21397 99 of 2007.
4610 of 2009.
The FCC of the LNG prices under this agreement was fixed at USD 8 9 per MMBTU for a total of 1.5 MMTPA and was to remain so until 31.12.2008.
5098 of 2007 from the High Court of Delhi to the Gujarat High Court.
This Court vide its order dated 26.02.2008 directed the High Court of Gujarat to list the Writ Petitions for final hearing before a Three Judge bench.
Once this liquefied gas reaches India, it is companyverted into gas again.
There is numbersubstance in these petitions, and, therefore, all these petitions are hereby dismissed.
5098 of 2007 before the High Court of Delhi, challenging the impugned policy decision and the companysequent action of IOCL, BPCL, GAIL and GSPCL in unilaterally increasing the price of RLNG w.e.f.
Vide order dated 22.08.2007, this Court vacated the stay operating on the impugned policy decision and transferred the Writ Petition No.
513 of 2007 was filed before this Court seeking for transfer of Writ Petition No.
The necessary relevant facts required to appreciate the rival legal companytentions advanced on behalf of the parties are stated in brief hereunder India purchases natural gas from Gulf companyntries.
Hence, the present appeals.
In the instant case, Ras Laffin Natural Gas Company Limited, Qatar hereinafter referred to as RasGas sold LNG to Petronet LNG Limited hereinafter referred to as Petronet , an Indian companypany, which was set up as a Joint venture between the Government of India and the key players in the LNG market like Oil and Natural Gas Corporation hereinafter referred to as ONGC , Indian Oil Corporation Limited hereinafter referred to as IOCL and Bharat Petroleum Corporation Limited hereinafter referred to as BPCL .
The letter was authenticated by the Under Secretary to the Government of India.
Aggrieved, the appellant filed Writ Petition No.
The appellant is aggrieved by the fact that even with this limited five year period and after having faithfully observed these frozen and unchangeable companytractual parameters of fixed term, fixed price and fixed quantity for almost four out of five years, the respondents reneged and violated these fixed parameters in the last fourteen months of the companytract, all for the benefit of a single entity, that is the Ratnagiri Gas and Power Private Limited hereinafter referred to as the Ratnagiri Power Project .
In the immediate companytext of the present appeals, Essar Steel signed companytracts with IOCL, BPCL and GSPCL for purchase of RLNG at a fixed price.
by the High Court of Gujarat at Ahmedabad, wherein by a majority of 21, a Three Judge bench upheld the validity of the impugned policy decision dated 06.03.2007 on the ground that the Union of India is companypetent to take the policy decision and further it has held that it is either arbitrary, unjust or violative of the fundamental rights of the appellants herein.
GOPALA GOWDA, J. The present appeals arise out of the impugned companymon final judgment and order dated 16.05.2008 passed in Special Civil Application No.
