After a brief lull, it’s back to square one for Amazon and Future Retail (FRL). The US retailing giant on Tuesday accused FRL of allowing Reliance Industries to take over its retail outlets despite submissions to the contrary in court.
Amazon, which is involved in a legal battle with FRL over the sale of the latter’s assets to Reliance Retail, said in a public notice that the false statements had been made knowingly as “FRL was on the verge of purportedly allowing handing over of the retail assets to the MDA Group”. Amazon said “these actions have been done in a clandestine manner by playing a fraud on the constitutional courts of India.”
While the Supreme Court had given Amazon and FRL time till March 15 to reach an out-of-court settlement, the counsels of the companies said in court that the talks had fallen through. Both parties now prefer a resumption of the arbitration proceedings before the Singapore tribunal that have been put on hold by the Delhi High Court.
In its notice published in newspapers, Amazon said any attempt by FRL and its promoters to transfer or dispose off assets would be in violation of the orders of the Singapore International Arbitration Centre’s Emergency Arbitrator (EA), which restrained FRL from going ahead with its Rs 24,713-crore merger with Reliance Retail, a subsidiary of Reliance Retail Ventures (RRVL).
Subsequently, the fully constituted Arbitral Tribunal had reaffirmed the EA’s order and in August last year, the SC upheld the award.
In Tuesday’s notice, Amazon claimed FRL had been attempting to transfer FRL’s retail outlets to the MDA Group “in a clandestine manner” by deceiving the courts.
Last Thursday, Future Retail said in a regulatory filing it had received termination notices for 342 large format retail (LFR) stores – including Big Bazaar, Fashion at Big Bazaar (fbb) and 493 small format retail stores such as Easyday and Heritage stores.
Reliance Retail had issued notices to terminate the sub-leases of 947 Future Group’s stores and proposes to reopen them after reconciling the stock and inventory position and rebranding them. Reliance had taken over the stores last month, Future Group had defaulted on rental payments. Once the reconciling of stock and inventory positions is over, the stores would be rebranded across categories as Reliance Digital, Reliance Smart and Reliance Fresh (groceries), and Reliance Trends.
Meanwhile, in the absence of a settlement, a Bench led by Chief Justice NV Ramana hinted at an interim order on Wednesday. Gopal Subramanium, senior Counsel for Amazon, will now need to move an application on the interim relief. Subramanium said that while Amazon wanted a dialogue in good faith, the takeover of the stores by Reliance was in process, despite the cases being heard in the Delhi High Court and NCLAT. “I do not want this message to go out that orders of the court are happily flouted,” he said.
While seeking resumption of arbitration proceedings, Amazon submitted that unless the apex court grants interim protection to it, there will be nothing left to fight over at a later stage.
However, the Future group, through senior counsel Harish Salve and Mukul Rohtagi, denied the accusations, saying they have not transferred the stores. “Amazon is driving us to our knees. We are broke. Shop takeover started 15 days ago. We have no control. Future Retail has no money to pay for the rent lease and therefore, Reliance moved in to take over the stores and is taking action despite the ongoing litigation. We can’t do anything,” Salve said.