scorecardresearch

Amazon feud: Future moves Supreme Court to stay tribunal ruling

Delhi High Court earlier refused to stay SIAC order blocking Future’s deal with Reliance

Amazon feud: Future moves Supreme Court to stay tribunal ruling
It also asked CCI to revoke the approval it had given to Amazon-Future Coupons (FCPL) deal in November 2019.

Future Retail (FRL) on Monday moved the Supreme Court against the Delhi High Court’s order that refused to stay the Singapore arbitration tribunal’s October 21 ruling which denied permission to the firm to go ahead with its Rs 24,713-crore merger deal with Reliance Retail.

Challenging the HC order that dismissed its plea for stay on the Singapore International Arbitration Centre’s interim order, FRL in its plea urged the SC to allow it to conduct a meeting of shareholders and creditors for approval to sell its retail assets to Reliance Retail in accordance with directions given by NCLT, Mumbai, on September 28.

Meanwhile, Amazon’s plea against the National Company Law Tribunal’s (NCLT) order that allowed FRL to convene meetings of its shareholders and creditors for seeking approval to its decision to sell its retail assets to Reliance Retail is likely to come up for hearing in the SC on November 11.

The single judge by “only issuing notice and withholding grant of any ad-interim reliefs” has failed to appreciate that as a consequence of the tribunal’s interim order, grave and irreparable harm would be caused to the Future Group if it were not able to proceed with the disputed transaction,” the petition stated, adding that the HC could have passed the order on the lines of the apex court’s September 9 order that permitted NCLT to go ahead with the proceedings for approval of the deal subject to the condition that it shall not pass any final orders for the next four weeks.

This, according to FRL, would have stopped Amazon from interfering with the shareholders and creditors meetings peremptorily ordered by the NCLT, FRL said, pleading “grave public interest and balance of convenience” lay in its favour as the interim orders passed by the arbitral tribunal have far reaching consequences beyond Amazon’s investments and rights.

Alleging that Amazon’s objective is to put itself in a position where it can leverage the interim reliefs to wrongfully extract a commercial outcome in an underived manner, FRL said that the e-commerce firm, on the strength of just 9.82% shares held by FCPL in FRL is prejudicing the interests of its shareholders, including public shareholders, who will suffer complete annihilation of their share value due to FRL’s insolvency.

Besides, “the FIs and banks who have lent monies to FRL shall be rendered recourse-less and without remedy as regards their outstanding dues and the operational creditors would be made to lose all their outstanding amounts,” the petition said.

Earlier, FRL’s independent directors in a letter to the stock exchange have said that Amazon had violated of foreign exchange rules by making false representations to the Competition Commission of India to seek approval for its investment in Future Coupons, a promoter holding company. It also asked CCI to revoke the approval it had given to Amazon-Future Coupons (FCPL) deal in November 2019.

The Singapore International Arbitration Centre, while dismissing FRL’s plea to vacate the interim stay on the company’s deal with Reliance Retail, had also held that FRL is a party to the merger deal. Following the SIAC order, FRL had then moved the HC seeking a stay on the interim order as well as a nod to proceed with shareholders’ and creditors meeting for its proposed asset sale to Reliance Retail, for which it has already received clearance from the NCLT.

The dispute between FRL and Amazon has been on since October 25, 2020, when the Singapore’s Emergency Arbitrator passed an interim order restraining FRL from going ahead with its deal with Reliance Retail. Amazon, which had acquired an indirect minority stake in Future Group in 2019, 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.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.