Future Retail moves Supreme Court to stay Tribunal Ruling against Amazon

Amazon Future Group and Reliance symbol and Supreme Court

Chaini Parwani –

Published On: November 09, 2021 at 11:30 IST

Future Retail (FRL) moved the Supreme Court against the Delhi High Court’s ruling that denied the Singapore Arbitration Tribunal’s October 21 Order which did not permit the firm to go ahead with its Rs 24,713-crore merger deal with Reliance Retail. 

Future Retail (FRL) in its Petition pleaded before the Supreme Court to permit it to conduct a meeting of shareholders and creditors for approval to sell its retail assets to Reliance Retail in connection with guidelines given by National Company Law Tribunal (NCLT), Mumbai, on September 28.

The Petition stated that “The single Judge by only issuing notice and withholding grant of any ad-interim reliefs has failed to appreciate that as a consequence of the Tribunal’s Interim Order, grave and irreparable harm would be caused to the Future Group if it were not able to proceed with the disputed transaction.”

Further, the Petition stated that the High Court could have passed the Notice on the grounds of the Apex Court’s September 9 Order that allowed NCLT to move ahead with the Proceedings for approval of the deal subject to the condition that it shall not pass any final Orders for the next four weeks. 

Furthermore, FRL highlighted that due to the Order Amazon stopped from interfering with the shareholders and creditors meetings peremptorily ordered by the NCLT. 

FRL further alleged that Amazon’s aim is to put itself in a position where it can advantage the interim reliefs to unlawfully extract a commercial outcome in a constitutional manner and that Amazon, on the strength of just 9.82% shares held by Future Coupons Pvt Ltd (FCPL) in FRL is damaging the interests of its shareholders, including public shareholders, who will suffer complete demolition of their share value due to FRL’s insolvency. 

Previously, FRL’s independent Directors in a letter to the Stock Exchange stated that Amazon violated Foreign Exchange rules by making misrepresentations to the Competition Commission of India to solicit approval for its investment in Future Coupons, a promoter holding company.

Further FRL pleaded Competition Commission of India (CCI) to annul the approval it had granted to the Amazon-Future Coupons (FCPL) deal in November 2019. 

The Singapore International Arbitration Centre, while rejecting FRL’s Petition to abandon the Interim Stay on the company’s deal with Reliance Retail, had observed that FRL is a party to the merger deal. 

The dispute between FRL and Amazon has been in light since October 25, 2020, when Singapore’s Emergency Arbitrator adjudicated an interim order restraining FRL from moving ahead with its deal with Reliance Retail. 

Amazon, which had obtained an indirect minority stake in Future Group in 2019, has claimed that Future’s sale of its retail, wholesale, logistics and warehousing businesses to Reliance Retail infringed its pre-existing contract, which involved a Right of the First Offer and a Non-Compete Clause.

Also Read: Battle of the Titans: A Deep Dive into the Amazon Vs Future & Reliance Case

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