The Supreme Court on Tuesday reserved verdict on a batch of pleas filed by Future group firms against a Delhi High Court order declining stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the Singapore International Arbitration Centre (SIAC).
“We reserve the order. All the four SLPs (special leave petitions) are over. A lot of homework for us. Anyway I will not write a lengthy judgment,” a bench headed by Chief Justice N V Ramana said.
Initially, the bench, also comprising justices A S Bopanna and Hima Kohli, suggested the counsels for Amazon and the Future group firms that the single judge bench of the Delhi High Court be allowed to hear the statutory appeals of the Future group against the final arbitral award of the SIAC.
The bench said that the pleas, which are arising from the EA’s award and are pending before it, may not be “relevant now as the final award of the SIAC has already been passed”.
“Your (Future group) first SLP which has challenged Justice J R Midha (Delhi HC) order, we had said that no implementation of that order. We never said Delhi High Court to not hear the matter for what has come up subsequently,” the bench observed at the outset.
The apex court has reserved its order on two set of petitions filed by FCPL (Future Coupons Private Ltd ) and FRL (Future Retails Ltd).
One set of appeals challenged the March 18 order of the Delhi High Court which besides restraining FRL from going ahead with its deal with Reliance Retail, had imposed costs of Rs 20 lakh on the Future Group and others associated with it and ordered attachment of their properties.
The second set of appeals have been filed against the Delhi High Court’s recent order declining its plea for stay on an arbitration tribunal decision refusing to interfere with the SIAC’s EA, which restrained it from going ahead with the Rs 24,731 crore merger deal with Reliance Retail.
During the hearing on Tuesday, senior advocates Harish Salve and Mukul Rohatgi appeared for FRL and FCPL respectively and the US e-commerce major, Amazon, was represented by senior lawyers Gopal Subramanium and Ranjit Kumar and others.
Salve said for the merger deal to go ahead the adverse orders passed last year on February 2 and March 18 have to be quashed.
The US firm, which has invested in FCPL, has been opposing the deal.
The senior lawyer said the FRL will “sink with 30,000 employees losing their jobs” if the deal with RRL does not go through.
The FRL and FCPL said that they be allowed to go forward with the interlocutory proceedings of the scheme with Reliance to ensure that they would be able to finalise the deal once the dispute with Amazon is concluded.
“We first sank because of a lockdown when people wouldn’t go to shops. We are in this financially precarious situation. Fortunately, banks are willing to wait and say that if a transaction goes through Reliance deal will pay off the banks. The Reliance deal is close to Rs 26,000 crores, and Amazon’s stake is Rs 14000 crores. Around 30,000 jobs will be saved. If you put this all together, let us get to that final stage. Let that final stage does not go through. Amazon’s interests are not hurt,” Salve said.
He said even if eventually it was found by the courts that Reliance Industries Ltd arm could not acquire assets of FRL, the September 9, 2021 order of the apex court protected Amazon.
On September 9, last year, the apex court had stayed for four weeks all proceedings before the high court in relation to the implementation of the EA and also directed statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI) and Securities and Exchange Board of India (Sebi) not to pass any final order related to the merger deal in the meantime.
The SIAC, in the EA, had granted relief to US e-commerce major Amazon by restraining the Future from going ahead with the Rs 24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail.
Amazon had dragged Future Group to arbitration at SIAC in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance Retail.
On October 21 last year, a duly-constituted panel of arbitrators at the SIAC reiterated the EA’s decision. On October 29, 2021, the Delhi High Court declined Future Group’s plea for stay on the arbitration tribunal. The high court sought response from Amazon which had challenged the merger before the SIAC, and listed the appeals by FCPL and FRL for further hearing on January 4, 2022.
Kishore Biyani and 15 others including FRL and FCPL have been embroiled in a series of litigations with Amazon, an investor in FCPL, over the deal with Reliance. Following the EA, subsequently, a three-member arbitral tribunal was constituted to decide the issues arising from the deal.
Subsequently, the arbitration tribunal under the SIAC rejected on October 21, last year, the FRL plea to lift the interim stay granted by its EA on October 25, 2020, observing that “the Award was correctly granted”.
The FRL and FCPL had moved the top court against the high court order of August 17, 2021 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.
On August 6, last year, the Supreme Court gave the verdict in favour of Amazon and held that EA award, restraining the Rs 24,731 crore FRL-Reliance Retail merger deal, is valid and enforceable under Indian arbitration laws.
The apex court had also set aside the two orders of February 8 and March 22, 2021 of the division bench of the Delhi High Court order which had lifted the single-judge’s orders staying the FRL-RRL merger.
A bench headed by Justice R F Nariman, since retired, had dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.
Source: Business-Standard