The settlement of the dispute over the ownership of the Reliance group between Reliance Industries [Get Quote] chairman and managing director Mukesh D Ambani and Reliance Industries vice-chairman and managing director Anil D Ambani is still three or four months away, but both sides seem to have dropped demands for a non-compete clause and have instead tacitly agreed that they will not enter each other's areas of business for five years.

"Reliance Industries has gas and Mukesh Ambani may want to get into the power industry. Anil Ambani can bid for oilfields. This is not an issue," a source said. He said demands for a non-compete clause had been originally raised but were later dropped.

The Reliance 'ownership issue'

Attempts to contact Reliance executives for comments on a Sunday proved futile.

New mediators, too, have entered the picture. Two sources confirmed that the late Dhirubhai Ambani's sons-in-law, Duttaraj Salgaonkar and Shyam Kothari, were mediating in the dispute and trying to ensure a quick and fair resolution.

"They're playing a very positive role," a source said. The Ambani brothers have not met. Nor are any other meetings being held.

But ICICI [Get Quote] CEO and managing director K V Kamath, too, was still involved in the matter, a knowledgeable source said. Anil Ambani's financial adviser Amitabh Jhunjhunwala is representing the younger Ambani's interests.

Kamath is understood to have roped in JM Morgan Stanley chairman Nimesh Kampani to value the Reliance group's assets.

The ICICI managing director is said to have suggested a partition of the Ambani family's holdings in Reliance Industries in a 30:30:40 ratio, with Dhirubhai Ambani's widow retaining 40 per cent of the family holdings.

Mukesh Ambani would then buy his brother's 30 per cent stake. Anil Ambani seems to have demanded a premium for the shares in exchange for relinquishing management rights in Reliance Industries.

He, in turn, would then use the money to buy out Reliance Industries holdings in Reliance Energy [Get Quote], Reliance Capital [Get Quote] and Reliance Infocomm. The source also mentioned that a 50:50 ratio had been bandied about and that it was difficult to state which the correct formula suggested was.

However, the valuation of Reliance Infocomm still remains a bone of contention, sources said.

As has been widely reported, any settlement would probably leave Anil Ambani with Reliance Energy, Reliance Capital and Reliance Infocomm, which is currently run by Mukesh Ambani. The Reliance chairman would then be left with Reliance Industries and Indian Petrochemicals Corporation Ltd [Get Quote] and Reliance Lifesciences.

Reliance Infocomm had been offered to Anil Ambani around December 2004 but this was initially scoffed at. Only now is the younger Ambani said to be considering the offer in a more serious light.