Delhi HC Stays Direction to Maintain Status Quo on Future-Reliance Deal
The Delhi High Court on Monday stayed its single judge direction to Kishore Biyani-led Future Retail Ltd (FRL) and various statutory authorities to maintain status quo with regard to the Rs 24,713 crore deal with Reliance Retail. A bench of Chief Justice D N Patel and Justice Jyoti Singh passed the interim direction on FRL’s appeal challenging the February 2 order of the single judge.
The bench also declined US e-commerce giant Amazon’s request to keep its order in abeyance for a week so that it can explore appropriate remedies. The court while staying the February 2 order said that statutory authorities, like National Company Law Tribunal, CCI and SEBI, cannot be restrained from proceeding in accordance with law with regard to the deal.
FRL told the court that Amazon’s claims that it wanted to salvage the Indian company was “humbug”.
The argument was made before a bench of Chief Justice D N Patel and Justice Jyoti Singh by senior advocate Harish Salve after conclusion of arguments on behalf of the US company.
Amazon, represented by senior advocates Gopal Subramanium and Rajiv Nayar, commenced arguments at 2.15 pm on Monday from where they had left off on February 5. They reiterated that FRL’s appeal, against a single judge order of February 2, was not maintainable.
They also argued that the October 25, 2020 Emergency Arbitrator (EA) order by the Singapore International Arbitration Centre (SIAC) was a valid award and enforceable. The EA order had restrained FRL from going ahead with the deal with Mukesh Ambani’s Reliance Retail.
After Amazon concluded its arguments, Salve, in rebuttal, said that if Amazon wanted to salvage FRL, it could have easily invested Rs 25,000 crore which was “peanuts” for the US e-commerce giant. He said that Amazon keeps saying it wanted to and wants to help FRL, but it was all “humbug” as it did not take any steps to do so.
Salve further argued that the EA order was not valid as an earlier single judge order of December last year had held that there was no arbitration agreement between FRL and Amazon. He further said that the instant appeal against the February 2 order was maintainable under the Civil Procedure Code.
Amazon on February 5 had urged the court to declare that the EA award was akin to an order of court and enforceable like any other judicial direction. FRL had earlier told the high court that Amazon was opposing the Rs 24,713 crore deal with Reliance as the Mukesh Ambani company was a competitor, a contention denied by the US-based e-commerce giant which said it was interested in salvaging FRL.
FRL had told the court that Amazon was not concerned that if the deal fell through then all the shops of the Indian company would be closed down and it’s more than 25,000 employees would be without any livelihood. FRL, in its appeal filed through law firm Naik and Naik and Company and advocate Harshvardhan Jha, has claimed that if the February 2 order was not stayed it “would be an absolute disaster” for it as the proceedings before the National Company Law Tribunal (NCLT) for approving the amalgamation scheme have been put on hold.
It had also contended that the single judge’s status quo order will effectively derail the entire scheme which has been approved by statutory authorities in accordance with law. The February 2 order had come on Amazon’s suit seeking enforcement of the EA order restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.
In its suit, Amazon has also sought to restrain Kishore Biyani-led Future Group from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group. Besides that Amazon has 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. In August last, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance.
While reserving order on Amazon’s suit to enforce the EA order, Justice Midha directed all concerned authorities to maintain status quo in relation to the matters which are in violation of the arbitral award and to file status report with regard to the present status within 10 days.