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    Delhi High Court dismisses Future Retail’s plea against Amazon

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    The New Delhi High Court on Monday dismissed a plea from that sought to restrain US partner .com Inc from interfering in its $3.4-billion asset sale to Reliance Industries.  sold its retail assets in August to Reliance Industries in a deal Amazon said breached agreements Future made with the US ecommerce leader in 2019.

    A single bench of Justice Mukta Gupta refused to grant any interim reliefs on FRL’s plea. The court held as “not void” Future Retail Ltd’s (FRL) board resolution approving Reliance Industries Ltd’s (RIL) deal worth nearly Rs.24,000 crore and said that the statutory authorities would decide approval on the deal as per law.

    The observations were passed while the court was hearing a plea for an interim injunction restraining Amazon from writing to the SEBI, Competition Commission of India and other authorities about the arbitral order against its assets sale.

    It held that the Emergency Award was valid, and the -owned company’s resolution approving the transaction with Reliance was also valid.

    Amazon wrote a couple of letters to the capital markets regulator SEBI urging the regulator and the stock exchanges not to give a go-ahead to the Future-Retail deal in view of the Singapore arbitrator’s interim order.

    In October, an arbitration court in Singapore had directed a temporary stay on Future Retail’s buyout by the RIL-led Reliance Retail.

    Future Retail Ltd (FRL) filed a caveat in the Delhi High Court last month following the Singapore arbitration court’s interim stay order.

    Earlier, Future Group had urged the Indian stock exchanges, the BSE and the NSE, to process its application for the deal with Reliance Retail, as the arbitrator’s order does not restrict market regulator SEBI or the exchanges from considering and approving the scheme.

    The Root Cause

    Kishore Biyani-led Future Retail Ltd (FRL), had in November accused Amazon of adopting a media strategy of “having every development reported and converted into a line of communication with stock exchanges” regarding the Amazon-Future Coupons’ arbitration proceedings in Singapore.

    The court also termed FRL’s resolution approving the transaction with Reliance Retail as valid.

    In August this year, Biyani’s Future Group entered into an agreement with Reliance Retail, a subsidiary of the umbrella Reliance Industries Limited (RIL) group, to sell its retail, wholesale, logistics and warehousing to the latter. As a part of the deal, Future Retail will sell its supermarket chain Big Bazaar, premium food supply unit Foodhall and fashion and clothes supermart Brand Factory’s retail as well as wholesale units to Reliance Retail.

    Last year, Biyani’s Future Retail had signed another deal with global e-commerce giant Amazon. As part of the deal, Amazon had acquired 49 per cent stake in Future Coupons, the promoter firm of Future Retail in a deal worth nearly Rs 2,000 crore.

    While Future Retail would be able to place its products on Amazon’s online market place, the two had also agreed that the Future Retails products would also be a part of Amazon’s new plan, which intended to deliver products in select cities within two hours of a customer ordering them. Future Retail has more than 1,500 stores pan India.

    After Future’s agreement with Reliance, Amazon said the deal was a violation of a non-compete clause and a right-of-first-refusal pact it had signed with the Future Group.