Will collapse if Reliance Industries deal does not go through: Future to HC

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January 29, 2021 8:15 AM

Future Retail (FRL) on Thursday told the Delhi High Court that it intends to proceed with the Rs 24,713-crore deal to sell its retail assets to Reliance Industries and is seeking approval from the National Company Law Tribunal (NCLT) for demerger.

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Future Retail (FRL) on Thursday told the Delhi High Court that it intends to proceed with the Rs 24,713-crore deal to sell its retail assets to Reliance Industries and is seeking approval from the National Company Law Tribunal (NCLT) for demerger.

The HC was hearing Amazon’s plea seeking the enforcement of an emergency arbitrator’s order restraining Future Group from going ahead with the deal. Senior counsel Darius Khambata, on behalf of Future Group, told Justice JR Midha that a petition (by Future Consumers) has been filed before NCLT, Mumbai, for demerger as the group has all the necessary regulatory approvals in place.

The judge asked the Future Group lawyer, “Do you propose to take any action in violation of the Emergency Award in the near future? Would you hold your hand back? The matter is already in regulatory sphere. Some action you’ve already taken. Do you want to take any further action?”

“I want to proceed,” Khambata replied, adding that “if the transaction doesn’t go through, I (FRL) will collapse.” Amazon, in its plea, has accused Future Group of “deliberate and wilful breach and violation” of the SIAC emergency arbitrator’s award, and has sought detention of Future Group’s promoters, including CEO Kishore Biyani, and seizure of their assets.

Future Group objected to the maintainability of Amazon’s petition, saying the emergency arbitrator’s order cannot be enforced. “Under Section 17, only the arbitral tribunal can pass orders. What Amazon is seeking to enforce is something else. Whatever order is passed at interim stage is not an order under Section 17… this EA’s order will remain in force only till the final arbitrator is appointed,” Khambata said.

Seeking to restrain FRL and others from taking steps in furtherance of the deal with Reliance and disposing of FRL’s retail assets, senior counsel Gopal Subramanium, appearing for Amazon, argued that the emergency arbitrator passed the interim order after hearing all the parties. He also said he had jurisdiction and that Future Retail was bound by arbitration.

The SIAC on October 25 had passed an interim order in favour of Amazon, barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

He also said that the parties, including promoters and directors of these companies, undertook to abide by the order. Even then, a series of letters were written by FRL to statutory authorities — the CCI and SEBI — saying that the award should be ignored, it is a nullity. Until the award is alive, it is efficacious and no party can sit in judgement and declare an order to be a nullity, the senior counsel said. The court will resume hearing the case on Friday.

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