Future Retail may not have been in breach of SIAC ruling: High Court

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The Delhi High Court observed that Future Retail Ltd (FRL) may not have been in breach of the SIAC’s ruling on account of the February takeover of around 900 Future Group outlets by Reliance Industries (RIL).

“FRL surrenders its leases to the landlords. Landlords then enter into agreements with RIL. In that case, is it not possible, suppose they raise an argument saying that, therefore, it is not that there is a breach of the emergency arbitrator award because FRL has not surrendered it to RIL,” Justice C Hari Shankar said on Monday. “FRL has surrendered to landlords which is not interdicted by the tribunal.”

Similarly, landlords in turn signed with RIL that is also not restricted by the Singapore award, the court observed. “So maybe by a roundabout way they (Reliance) got what they otherwise could not got. So simply speaking it is not a breach,” Justice Shankar said during a hearing on Monday.

Amazon lawyers have been arguing that an arbitral tribunal has restricted FRL from alienating its retail assets till the arbitration centre gives its final verdict in the Amazon-Future Group dispute. Amazon had labelled the issue of February takeover of 835 of FRL stores by Reliance as a “sham transaction.”

In October 2020, an emergency arbitrator of the Singapore International Arbitration Centre (SIAC) has stayed the proposed sell-off of Future Group retail assets to Reliance Retail.

Over the weeks, Amazon has been raising the issue of Reliance’s February takeover of more than 800 of FRL stores in the Delhi High Court. Reliance had taken possession of those outlets for allegedly non-payment rents by Future Group for months to the original lease holder Reliance Projects & Property Management that had sub-leases those stores to the Kishore Biyani-founded company.

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