The Delhi High Court on Monday stayed its single judge direction to 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, according to a report by news agency PTI.
It said that statutory authorities, like National Company Law Tribunal, Competition Commission of India (CCI) and SEBI, cannot be restrained from proceeding in accordance with law with regard to the deal.
The bench also declined Amazon’s request to keep its order in abeyance for a week so that it can explore appropriate remedies. The court issued a notice to Amazon and sought its stand on FRL’s appeal by February 26 when it will commence day-to-day hearing of the matter.
Amazon had first filed a plea before the single judge for enforcement of the October 25, 2020 Emergency Arbitrator (EA) award by the Singapore International Arbitration Centre (SIAC) restraining Kishore Biyani-led FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail. In the interim order on Monday, the division bench said it was staying the single judge order as firstly, 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 further said it was of the prima facie view that the share holding 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”. Another reason given by the court for its interim order was that there was prima facie no reason to seek a status quo order before the single judge. The bench said there were a lot of contentious issues involved in the matter and it was not going to adjudicate on them at this stage.
It also said that its observations were only prima facie and the single judge ought not to be influenced by them when pronouncing the order on Amazon’s plea for enforcement of the October 25, 2020 Emergency Arbitrator (EA) award by the Singapore International Arbitration Centre (SIAC) restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.
In August last, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance.Subsequently, Amazon took FRL into an emergency arbitration before the SIAC over alleged breach of contract. After the SIAC’s EA order of October 25, 2020 was passed, Amazon wrote to the 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 the Amazon from writing to SEBI, CCI and other regulators about SIAC’s order, saying it amounts to interfering with the agreement with RIL.