United States-based e-commerce giant Amazon has approached the Supreme Court against an order of the Delhi High Court staying the status quo order on the ₹24,713 crore deal between Kishore Biyani-led Future Retail Limited (FRL) and Mukesh Dhirubhai Ambani’s Reliance Retail.
On February 8, a Division Bench of the Delhi High Court led by Chief Justice DN Patel had stayed a single judge’s direction of February 2 putting a temporary freeze on the deal between Future Retail and Reliance. The order came on FRL’s appeal seeking stay of the February 2 order where FRL claimed that due to the status quo position, the proceedings before the National Company Law Tribunal (NCLT) for approving the amalgamation scheme were held up. This could be an “absolute disaster” for the company with its outlets across India being shut and nearly 25,000 employees losing their livelihood.
The February 8 order of the Delhi High Court had noted, “Statutory authorities should not be restrained from proceeding in accordance with law on Future-Reliance deal,” while lifting the single judge’s status quo direction.
Amazon in its appeal before the Supreme Court has raised a host of legal issues, primary among then being the maintainability of FRL’s petition before the Delhi High Court Division Bench. It was Amazon that had moved the single judge to restrain Future Group from proceeding further with entities of the Reliance Group.
The US retail giant banked on the October 25, 2020 Emergency Arbitrator (EA) order passed by the Singapore International Arbitration Centre (SIAC) that restrained FRL from going ahead with the deal with Reliance Retail.
The petition by Amazon said, “No provision for appeal is provided against an order passed under Section 17(2) of the Arbitration and Conciliation Act. The respondents (FRL) have not challenged the EA order itself, but have preferred to challenge the single judge order enforcing the EA order.” Further, the foreign retailer stated that the single judge’s status quo order was passed for the limited purpose of preserving the rights of the parties till pronouncement of final orders and the Division Bench ought not to have issued its order “hastily”.
Stating consequences of lifting the status quo, Amazon’s petition said, “The greater the progress made towards the completion of the impugned transaction, the harder it will be to unravel it. Over time, the interests of additional third parties may also become entwined with the transaction and be subsequently compromised.”
Amazon had contended before the High Court that the award was valid and enforceable against FRL. In its suit, it had even sought detention of Biyanis, directors of Future Coupons Private Limited (FCPL) and FRL and related parties in a civil prison besides attachment of their properties for alleged “willful disobedience” of the EA order. The e-retailer sought stay of the Division Bench’s decision terming it to be illegal, arbitrary, and against principles of natural justice, equity and fair play.
After the Division Bench had passed its order, Amazon had requested the High Court to keep its order in abeyance for a week. However, the request was declined by the bench, also comprising Justice Jyoti Singh.
It was in August last year, FRL entered into an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance Retail.-Hindustan Times