The Supreme Court Monday stayed the ongoing proceedings before the Delhi High Court in the case related to the amalgamation of Future Retail Ltd (FRL) with Reliance Retail.
The Supreme Court Monday stayed the ongoing proceedings before the Delhi High Court in the case related to the amalgamation of Future Retail Ltd (FRL) with Reliance Retail. A bench of Justices R F Nariman, B R Gavai and Hrishikesh Roy posted the matter for hearing on May 4 and directed that all pleadings be completed in the matter. Amazon had moved the apex court on April 8 challenging the Delhi High Court’s division bench order that had vacated a stay on Kishore Biyani-led Future Group proceeding with its Rs 24,713 crore asset sale to Reliance Industries.
Prior to this, FRL had moved the division bench of the high court against its a single judge’s order upholding the Singapore’s Emergency Arbitrator’s (EA) order restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail to sell its business.The division bench had granted Future a reprieve from a March 18 single-judge order that restrained it from taking any steps to sell assets to Reliance.
The petition by the US based e-commerce giant has sought a stay on the March 22 order of the division bench, terming it “illegal”, “random”, “inequitable and unfair”. Amazon and Future have been locked in a bitter legal tussle after the US firm dragged Future Group to arbitration at SIAC in October last year, 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. The Future group had however moved the National Company Law Tribunal (NCLT) seeking regulatory approvals to the Rs 24,713 crore deal with Reliance.
Amazon had filed a plea before the high court (single judge) for enforcement of the October 25, 2020 Emergency Arbitrator (EA) award by Singapore International Arbitration Centre (SIAC) restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.
The high court division bench however said that it was staying the single judge order as FRL was not a party to the share subscription agreement (SSA) between Amazon and Future Coupons Pvt Ltd (FCPL) and the US e-commerce giant was not a party to the deal between FRL and Reliance Retail.
The bench had further said that it was of the prima facie view that the shareholding agreement (SHA) between FRL and FCPL, the SSA between FCPL and Amazon and the deal between FRL and Reliance Retail “are different” and “therefore, the group of companies doctrine cannot be invoked”. In its suit before the single judge for enforcing the EA award, Amazon had sought to restrain FRL from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group.
Amazon had also sought detention of the Biyanis, directors of FCPL and FRL and other related parties in civil prison and attaching of their properties for alleged “wilful disobedience” of the EA order. After the SIAC’s EA order, Amazon wrote to the Securities and Exchange Board of India (Sebi), stock exchanges and CCI, urging them to take into consideration the arbitrator’s interim decision as it is a binding order.
FRL thereafter moved the high court to restrain Amazon from writing to Sebi, CCI and other regulators about SIAC’s order, saying it amounts to interfering with the agreement with Reliance. A single judge on December 21 last year had on FRL’s plea passed an interim order allowing Amazon to write to the statutory authorities, but also observed that prima facie it appeared the US e-commerce giant’s attempt to control Future Retail was violative of FEMA and FDI rules.