Future-Reliance deal: SC stays Delhi HC proceedings on Amazon's plea
The Supreme Court on Thursday stayed all proceedings before the Delhi High Court in the Amazon-Future Group-Reliance dispute. The top court stayed the proceedings initiated by Amazon seeking to enforce an order by a Singapore-based arbitrator. The concerned order had halted a $3.4 billion merger deal between Future Retail Limited and Reliance group, which favored Amazon. Here are more details.
An SC bench—headed by CJI NV Ramana—was hearing a special leave petition by Future Coupons Private Ltd and Future Retail Ltd. The petition challenged a March order passed by the Delhi High Court that directed the attachment of Future Group and its promoter Kishore Biyani's assets. It also issued a show-cause notice for the civil arrest of Biyani and Future Group's directors.
The SC on Thursday stayed all proceedings before the Delhi HC. The court also asked all authorities, including the NCLAT, CCI, and the SEBI to not pass final orders in the matter for four weeks. The court passed the order after hearing arguments from Future Group's counsel—senior advocates Harish Salve and Mukul Rohatgi—and senior advocate Gopal Subramanium for Amazon.
Amazon had bought a 49% stake in one of Future's unlisted firms, Future Coupons, in 2019 with a right to buy into Future Retail for a period ranging from three to 10 years. Future Coupons owns a 7.3% stake in Future Retail. Last August, Future Group announced that it would sell its retail, wholesale, and logistics businesses to Reliance's retail arm Reliance Retail Ventures.
According to Amazon, Future violated its contract with the US firm by agreeing to sell its retail assets to Reliance Industries last year. However, both Future and Reliance have continued to push for the deal as the former denies any wrongdoing. Last October, a Singapore-based arbitrator halted the Future Group-Reliance merger and Amazon said the order was enforceable under Indian laws.
In March, a single-judge Delhi HC bench of Justice JR Midha directed the attachment of property of Future Group companies and their promoters for violating the Singapore arbitrator's emergency award. The court also asked them to file additional affidavits listing details of their assets and properties. Further, the court had asked Future Retail to deposit Rs. 20 lakh to the PM's COVID-19 fund.
Last month, an SC bench headed by Justice RF Nariman ruled in Amazon's favor. The court held that the Singapore arbitrator's emergency award was enforceable under Indian laws. It also ruled that the single judge's order was not appealable to the HC's division bench under Section 37(2) of the Arbitration Act. Thus, the top court had reinstated the order of the Delhi HC.