Future Group moves HC against order restraining to go ahead with RIL deal

Kishore Biyani

Future Group Saturday approached the Delhi High Court challenging a single judge's order upholding the Singapore's Emergency Arbitrator's (EA) order restraining Future Retail Ltd (FRL) from going ahead with its Rs 24,713 crore deal with Reliance Retail to sell its business, which was objected to by US-based e-commerce giant Amazon.

The appeal by FRL, Future Coupons Pvt Ltd (FCPL) will be heard on March 22 by a bench of Chief Justice D N Patel and Justice Jasmeet Singh.

The appeal, filed through advocate Harshvardhan Jha, has challenged the single judge's March 18 judgment directing Kishore Biyani-led FRL not to take further action in relation to the deal with Reliance and holding that the group willfully violated the Singapore Arbitrator's order.

Justice J R Midha had rejected all the objections raised by Future Group and imposed a cost of Rs 20 lakh on the Future Group and its directors and directed them to deposit the amount in Prime Minister's Relief Fund within two weeks for being used for providing COVID-19 vaccination to senior citizens of Below Poverty Line (BPL) category of Delhi.

The March 18 verdict had come on Amazon's plea seeking direction to order enforcement of the award by Singapore's EA on October 25, 2020, restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.

The high court, which directed the presence of Biyani and others before it on April 28, had also ordered attachment of their properties and asked them to file an affidavit detailing their assets as on today within one month.

It had also asked them to show cause as to why they be not detained under civil prison for a term not exceeding 3 months for violating the emergency arbitrator's order and file reply within two weeks.

The single judge, which has listed the matter for April 28 for reporting compliance of its order, had held that the EA is an arbitrator for all intents and purposes and he had rightly invoked the 'Group of Companies' doctrine in relation to the Future Group companies.

It had said the respondents have raised a vague plea of nullity without substantiating the same and it was done to mislead this Court.

It had also directed the Future Group to approach authorities for recalling the approvals granted for the FRL-Reliance deal and also asked them not to violate the EA's October 25 last year order.

The high court had also asked the Future Group to place on record the details of action taken by it in connection with the Reliance deal after the October 25, 2020 order.

Amazon, in its interim plea, had sought to restrain FRL from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group.

Future Group and Amazon have been locked in a battle after the US-based company took FRL into the emergency arbitration over alleged breach of a contract between them.

Justice Midha had earlier, in an interim order, directed FRL to maintain status quo in relation to its deal with Reliance. However, it was stayed by the division bench of the high court.

Amazon challenged the division bench's order before the Supreme Court where the plea is pending.

Amazon.com NV Investment Holdings LLC, in its plea, had also sought detention of the Biyanis, directors of Future Coupons Pvt Ltd (FCPL) and FRL and other related parties in civil prison and attaching of their properties for alleged "wilful disobedience" of the emergency arbitrator's order.

Amazon had also sought to restrain Future Group from taking any steps to transfer or dispose of FRL's retail assets or the shares held in FRL by the Biyanis in any manner without prior written consent of Amazon.

The three domestic firms -- FRL, FCPL and Reliance -- however had contended that if Amazon's claim -- that it indirectly invested in FRL by investing in FCL -- was accepted then it would amount to a violation of Indian foreign direct investment laws which permit only 10 per cent investment by a foreign entity in the multi-brand retail sector.

In August last year, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance.

The SIAC on October 25 last year, had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

Subsequently, Amazon wrote to SEBI, stock exchanges and Competition Commission of India, urging them to take into consideration the Singapore arbitrator's interim decision as it is a binding order, FRL had earlier told the high court.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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