The most famous sibling rivalry in business is no nearer an end. That much has been established over the past few weeks as a fresh row rages between the Ambani brothers. This lays rest to speculation early in the year, starting about the time their mother Kokilaben’s 75th birthday was celebrated, that Mukesh and Anil were close to burying the hatchet.

The fresh sparks also reinforce deep (irreconcilable?) differences between the two, and the fact that reporters who saw a truce had got it all wrong. In fact, the row over the KG gas deal might turn out to be the most bitter battle yet between the two billionaires. Nearly $10 billion is at stake.

So, how did this all come about?

It arose directly from the deal the two Ambanis signed when they carved out their father’s business empire. Under it, elder brother Mukesh’s Reliance Industries Limited agreed to sell gas to younger brother Anil’s Reliance Natural Resources Limited at a discounted rate of $2.34 per million BTU. The price was based on a benchmark set by RIL during a successful bid to supply gas to the state-owned National Thermal Power Corporation. So far so good.

The gas price quoted is nearly $2 less than today’s market price. This means RNRL will reap a bonanza because the agreement is for large amounts of natural gas (80 million metric standard cubic meters per day) and extends over 17 years.

Now this is not good for big brother. Mukesh is already contesting the deal with NTPC, not to mention the one with his younger brother. His contention: the deal between the brothers violates a Production Sharing Contract RIL has signed with the Indian government. This agreement is on rights to the gas in the Krishna Godavari Basin, where RIL found gas.

The Bombay High Court recently upheld the complicated family agreement, brokered by former ICICI chief K.V. Kamath, even though it has not made been made public. But Mukesh and the Indian government contend the part pertaining to the gas price violates the PSC and are on appeal in the Supreme Court.

Anil has been crying hoarse, accusing Oil Minister Murli Deora – an old crony of his late father Dhirubhai Ambani – of favouring his older brother. He has levelled a number of other allegations – formidable and credible, one must say – regarding the role of the Indian government in protecting the rights of the state-owned NTPC in its contract with RIL.

Mukesh, in contrast, has responded with characteristic silence. Only his lawyers and other spokesmen speak. Even though the Supreme Court is vested with the responsibility of ruling on the case, an obvious question nobody is asking is: Did Mukesh sign the family agreement knowing fully well that the part pertaining to the gas price would violate RIL’s contract with the government? Or intending to contest it in the future? If so, can Anil seek any form of redress? And, are there other parts of the deal that could lead to more disputes in the future?

One thing is clear: Regardless of which brother wins the battle, the Indian government will likely be the loser. If Mukesh wins, the NTPC deal could be in jeopardy and the public sector unit could face significant losses; and if Anil wins, the royalties that the government will get from the KG Basin gas will be significantly diminished.

Now we know what the great sibling rivalry is doing to our country.