The Supreme Court on Tuesday allowed Future Retail (FRL) to approach the Delhi High Court for seeking approval to resume proceedings for its Rs 24,731-crore merger deal with Reliance Retail before the National Company Law Tribunal beyond the stage of meeting of shareholders and creditors.
A bench led by Chief Justice NV Ramanan granted this liberty in view of FRL’s submissions that continuation of the NCLT proceedings for grant of final approval to the proposed merger scheme will not adversely affect Amazon in any manner. Accordingly, it asked the single judge of the HC to consider all the contentions and pass appropriate order as to continuation of the NCLT proceedings and other regulatory approvals expeditiously.
Last year, the apex court had restrained the NCLT from taking a final call on the deal between Future Retail and Reliance Retail, even as it had allowed the tribunal to go ahead with the proceedings for the merger.
On February 1, the Supreme Court had set aside the Delhi HC’s three interim orders that had restrained FRL from going ahead with its merger deal till it decided on the matter of Singapore arbitration proceedings initiated by Amazon in 2020. The apex court had remanded the matter back to the HC, which is scheduled to hear on February 24 a batch of petitions/appeals on the ongoing legal tussle between Amazon and Future Group over the FRL-Reliance deal.
FRL senior counsel Harish Salve had contended that the NCLT proceedings for grant of final approval would take six to eight months and it was only when the final scheme is sanctioned that the retail assets of FRL would get alienated. So long as the final order of sanctioning is not passed by the NCLT, Amazon is not prejudiced in any manner, he said, adding that there is an imminent threat of insolvency and further delay in the NCLT proceedings will have serious ramifications like rendering the agreement between the FRL-Reliance group redundant. He further said that the livelihood of 22,000 employees of FRL are also at stake.
Another Future group company, Future Coupons’ (FCPL’s) senior counsel Mukul Rohatgi submitted that the Competition Commission of India had revoked initial Amazon-FCPL share purchase, which effectively nullifies the arbitration. However, Amazon senior counsel Gopal Subramanium had argued that FRL so far had conducted NCLT proceedings in contravention of the Emergency Arbitrator’s order as well as the enforcement order passed by the single judge of HC.
The spat between Future Group and Amazon has been on since October 25, 2020, when the Singapore’s EA passed an interim order restraining FRL from going ahead with its deal with Reliance Retail. The two sides have been embroiled in a legal battle over FRL’s move to sell its retail assets to Reliance Retail for Rs 24,500 crore. Amazon, which had acquired an indirect minority stake in Future Group in 2019 for Rs 1,400 crore, has alleged that Future’s sale of its retail, wholesale, logistics and warehousing businesses to Reliance Retail breached its pre-existing contract, which included a right of the first offer and a non-compete clause.