Delhi HC judgement would have not come in way of NCLT proceedings, says Future Group

By: |
March 19, 2021 3:57 PM

The promoters will take appropriate remedies as advised over the directions passed by Justice J R Midha, Future Retail said in a regulatory filing while hinting that it may challenge the order by filing an appeal.

"The Supreme Court has directed that, in the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme," said Future Retail."The Supreme Court has directed that, in the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme," said Future Retail.

Kishore Biyani-led Future Retail on Friday said the order passed by the single-member bench of the Delhi High Court would have no impact on the NCLT proceedings for its Rs 24,713 crore deal with Reliance Industries and said it is considering “appropriate remedies” against it.

The promoters will take appropriate remedies as advised over the directions passed by Justice J R Midha, Future Retail said in a regulatory filing while hinting that it may challenge the order by filing an appeal.

“We are advised that this order does not come in the way of the continuance of the ongoing NCLT proceedings, being inconsistent with the order dated February 22, 2021, of the Supreme Court,” said Future Retail.

It is to be pointed out that the portions of the operative part of this detailed order, already covered by the ad-interim order dated February 2, 2021, has been stayed by the Division Bench of Delhi High Court in an appeal filed by Future Retail.

Amazon has filed an appeal in the Supreme Court against the order passed by the Division Bench. The Supreme Court, in its order in Amazon’s appeal, has not vacated the stay granted by the Division Bench (which stay is still in operation).

“The Supreme Court has directed that, in the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme,” said Future Retail.

In its 134-page judgement, Justice Midha directed Kishore Biyani-led FRL not to take further action on the deal with Reliance and held that the group willfully violated the EA’s order.

The high court rejected all the objections raised by Future Group and imposed a cost of Rs 20 lakh on it as well as its directors.

It directed them to deposit the amount in Prime Minister’s Relief Fund within two weeks for being used for providing COVID-19 vaccination to senior citizens of Below Poverty Line (BPL) category of Delhi.

The high court’s judgement came on Amazon’s plea seeking direction to order enforcement of the award by Singapore”s EA on October 25, 2020, restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.

On January 25, Amazon had approached the Delhi High Court seeking enforcement of the interim order of the Emergency Arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) that had restrained FRL from going ahead with the deal with Reliance.

The Future-Reliance deal has already received clearance from CCI, SEBI and bourses, and the scheme of arrangement is now awaiting the nod from the NCLT and shareholders. On August 29, 2020, Future Group had announced that its retail and wholesale business would be sold to Reliance Retail, owned by oil-to-chemical conglomerate RIL in a Rs 24,713 crore deal.

In October 2020, Amazon dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC), arguing that Future violated the contract by entering into the deal with rival Reliance. Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at SIAC, arguing that the latter had violated their contract by entering into the deal with rival Reliance.

Amazon had invested in Future Coupons in August 2019 with an option of buying into the flagship Future Retail after a period of three to 10 years.

On October 25, 2020, an interim award was passed in favour of Amazon with a single-judge bench of V K Rajah barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

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