The Delhi High Court on Monday stayed its single-judge direction to Future Retail Ltd (FRL) and various statutory authorities to maintain the status quo with regard to the Rs 24,713-crore deal with Reliance Retail in a setback for Jeff Bezos-led e-commerce giant Amazon, which has challenged the transaction.
A division Bench of Chief Justice D N Patel and Justice Jyoti Singh was hearing the appeal filed by FRL against the court’s order passed last week. The court had said it was satisfied that an immediate interim order was required to be passed to protect the rights of Amazon.
On Monday, the division Bench noted that FRL was not a party to an arbitration agreement with Amazon and prima facie the “group of companies” doctrine could not be invoked in the present case as the three agreements — Future Retail Shareholding Agreement (SHA), Future Coupons Pvt Ltd (FCPL) SHA, and FCPL Share Subscription Agreement — were distinct in nature, according to law platform Bar & Bench.
The court observed that there was no reason to seek a status quo order from the single judge.
It stated that statutory authorities like the Securities and Exchange Board of India (Sebi) and the Competition Commission of India (CCI) could not be restrained from “proceeding in accordance with law”.
In August 2020, the Future group struck a $3.4-billion asset sale deal with RIL. Amazon then sent a legal notice to Future, alleging that the deal breached an agreement with the American e-commerce firm.
In 2019, Amazon had acquired a 49 per cent stake in Future Coupons (FCPL), the promoter entity of FRL, for about Rs 1,500 crore. The deal specified any disputes would be arbitrated under the Singapore International Arbitration Centre (SIAC) rules.
In a letter addressed to the stock exchanges on Monday, FRL said the company was pleased to inform that a division Bench had stayed the operation and effect of the order passed by a single judge last week. “The court also observed that statutory authorities cannot be restrained in private litigation from acting in accordance with the law,” said the letter.
Earlier, Senior Advocate Harish Salve, who appeared for FRL, had highlighted the disruption caused due to the Covid-19 pandemic on Future’s business and had informed the court that the retail firm might go bust and thousands may lose jobs due to Amazon’s interference.
He had argued how the deal with Reliance would take all the liabilities and save thousands of jobs and provide security to the banks and shareholders of the Future. Salve had said Amazon was opposing the deal as Reliance was a competitor.
“Reliance will pay future salaries. Reliance will give cash to Future,” Salve had contended. “In today’s time when people are looking at this glimmer of light.. you want to kill this company. You have a deal in hand.”
Salve had contended that Amazon had a deal with FCPL and it was their dispute. He had argued that FRL had no agreement with Amazon and there was no arbitration agreement between the two.
Source: Business-Standard