Supreme Court Allows Future Retail to Approach Delhi HC to Seek Continuation of Proceedings in NCLT

Amazon Future group Law Insider

Mitali Palnitkar

Published On: February 15, 2022 at 16:25 IST

On February 14, Future Retail Ltd (FRL) was granted liberty by the Supreme Court to approach the Delhi High Court seeking permission for continuing the Proceedings in National Company Law Tribunal (NCLT) in relation to sanction for merger scheme with Reliance.

The Bench consisted of Chief Justice of India N V Ramana, Justice AS Bopanna and Justice Hima Kohli. The Bench requested the Single Bench of Delhi High Court to pass appropriate Orders when FRL moves an Application. It observed that the Single Bench shall decide without being influenced by observations made in Supreme Court Order.

The Court noted that the Proceedings before NCLT are at Stage 8 – meeting of shareholders, while there are 15 stages for the final approval of the scheme and that FRL has undertaken to complete the 15 stages.

Senior Advocate Harish Salve for FRL submitted that FRL is incurring expenditure due to delay and there is a threat of Insolvency Proceedings against it. Also, the livelihood of 20,000 employees is at stake.

The Bench led by CJI Ramana had reserved Orders in FRL’s Plea on whether NCLT Proceedings with respect to Future – Reliance deal could be permitted to continue, and if FRL could be permitted to proceed with the steps of the scheme.

Future Group submitted that if in Future – Reliance deal goes through then 35,000 jobs would be protected, shops would not be closed, Banks would be paid out, and the debts of FRL would be paid out completely.

Mr Salve stated that FRL the Court may hold in the interim that no final Order would be passed to sanction the merger scheme, assets would not be transferred, and thus Amazon would be protected.

Senior Advocate Mukul Rohatgi representing Future Coupons Private Ltd referred to Competition Commission of India’s Order which revoked the Approval granted to Amazon and held that Amazon’s conduct was fraudulent and imposed a fine of Rs 200 crores.

Senior Advocate Gopal Subramanium representing Amazon stated that the Injunction Order passed by Emergency Arbitrator in 2020 was not reversed in the Appeal and thus the merger scheme could not be allowed to proceed in violation of the Emergency Award.

In relation to FRL’s objection to Arbitral Tribunal’s Jurisdiction, he stated that it was a Jurisdictional objection and was dismissed under Section 16 of Arbitration Act by the Tribunal.

He argued that the Order could be challenged in the final award and not in an Appeal before Delhi High Court under Section 37 as proposed by Mr Salve.

Senior Advocate Aspi Chinoy for Amazon stated that FRL wants the Court to allow NCLT Proceedings which is in derogation of the Injunction Order that has not been challenged yet.

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