New Delhi, February 9, 2021: Delhi High Court, in its division bench ruling on Monday, granted a huge relief for Future Retail Ltd group on the RIL deal case. As per the ruling, statutory authorities cannot be restrained from acting in complete accordance with the law and the court also ordered a stay on a previous order on the status of Future Retail’s INR 24,713 crores deal with Reliance.
FRL said the order was pronounced in open court on Monday and a copy of the same is awaited.
When updating stock exchanges about the court ruling, FRL said a division bench comprising Chief Justice D N Patel and Justice Jyoti Singh has stayed the operation and effect of the order passed by single judge J R Misha on February 2.
“ …inter alia, for the prima facie reason that the company is not a party to the shareholders agreement dated August 22, 2019, executed between Amazon, Future Coupons Private Limited and the promoters of FRL, under which arbitration was initiated by Amazon in Singapore. Court also observed that the statutory authorities cannot be restrained in private litigation from acting in accordance with the law,” read a statement released by FRL.
Relief for Future Retail after petition
The Delhi High Court’s order came over an urgent petition moved by FRL after the single-member bench directed maintaining status-quo over Future’s deal with Reliance.
The scheme of arrangement has already received approval from CCI and no objection was there from SEBI.
Following this, it approached NCLT Mumbai on January 26.
Amazon has not responded to emailed queries that were seeking its views on the court order and the future courses of action.
Last month, that is in January, Amazon had approached the Delhi High Court seeking enforcement of the interim order of the Emergency Arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) that had restrained FRL from going ahead with the deal with reliance.
Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged future group to arbitration at SIAC, arguing that the latter (Future Retail) had violated their contract by entering into the deal with their rival, Reliance.
Amazon had invested in future coupons in the year 2019, in August with an option of buying into the flagship future retail after a period of three to ten years.
In the month of August, last year, Future Retail group had entered into a deal with billionaire Mukesh Ambani’s RIL to sell its retail, wholesale, logistics, and warehousing units in a deal of Rs 24,713 crore.
After interim order in favour of Amazon, relief for Future Retail
In the month of October 25, 2020, an interim award was passed in favour of Amazon with a single judge bench of V.K. Rajah, barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Also, quite interestingly, the market regulator SEBI had barred certain other promoters of future retail ltd including Kishore Biyani, last week from the securities market for one year for indulging in insider trading in the shares of the company. However, FRL had also stated that the ban of one year will have “no impact” on the deal with the reliance industries. Including Kishore Biyani and some other promoters and Future Corporate Resources Pvt Ltd (FCRPL) have appealed against this order passed by the market regulator SEBI.
Justice Midha had directed FRL and other parties to maintain the status quo till the pronouncement of the reserved order.