Future-Reliance Deal: SC Stays Proceedings In Delhi HC On Implementing EA Award
The Supreme Court, on Thursday, stayed all the proceedings before the Delhi High Court related to the implementation of an award by Singapore's Emergency Arbitrator (EA) restraining Future Retail Ltd (FRL) from going ahead with its Rs 24,731 crore merger deal with Reliance Retail, for four weeks.
The FRL and Future Coupons Private Ltd (FCPL) have moved the Supreme Court against the Delhi High Court's order of August 17 which said that it would implement the earlier order by its Single-Judge restraining FRL from going ahead with the deal in pursuance of the EA's award.
The High Court had also ordered attachment of properties. Amazon dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC) in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance.
A Bench headed by Chief Justice NV Ramana, in a consent order, also directed the statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI) and market regulator SEBI not to pass any final order related to the merger deal for next four weeks.
It considered the statements of Senior Advocates Harish Salve and Mukul Rohatgi, appearing for FRL and FCPL respectively, that the arbitrator has reserved the final award in the case after hearing both sides.
Senior Advocate Gopal Subramanium, appearing for Amazon, which has challenged the merger, said that it was not interested in any punitive action against FRL, FCPL and their Directors and consented to passing of the order staying the proceedings before the Delhi High Court.
On August 6, the Supreme Court gave the verdict in favour of Amazon and held that Singapore EA's award, restraining the Rs 24,731 crore FRL-Reliance Retail merger deal, is valid and enforceable under the Indian arbitration laws.
Amazon entered into three agreements with the Biyani group and it contributed Rs.1431 crore in Future Coupon Private Limited (FCRL), the resources of which will stream to Future Retail Ltd (FRL).
The FRL was precluded from encumbering/transferring/selling/divesting/disposing its retail assets for "restricted persons", being prohibited entities, with whom FRL, FCPL, and the Biyanis couldn't deal. Within a couple of months from the date of Amazon contributing Rs. 1431 crore, the group went into an exchange with Mukesh Dhirubhai Ambani group who is a "restricted persons" under this agreement. The entering of the agreement by the Biyanis with Ambani Group suggests the blend of FRL with the Mukesh Dhirubhai Ambani group, the cessation of FRL as an entity and the total disposal of its retail assets for the group. Amazon then approached the SIAC alleging violation of contract by FRL.
With PTI inputs