- Supreme court flags off approaching NCLT: Amazon and the Future group have been engaged in a fierce legal battle for over a year as the US major is opposing the merger of FRL with Reliance Retail and this battle is far from over. Each decision has tremendous impact on economic ramifications for both the e-commerce giant. The apex court on February 3 had reserved its order on the plea of FRL seeking continuation of the merger deal process before the NCLT. The recent development in which Supreme Court on Tuesday has granted liberty to Future Retail Ltd (FRL) to move the Delhi High Court for seeking nod to proceed with the National Company Law Tribunal (NCLT) permission of going ahead with the Rs 24,731 crore merger deal with Reliance Retail. The following is quoted in media reports.
“We grant liberty to FRL to approach the Delhi High Court for seeking continuation of proceedings before the NCLT…We request the single judge (of the high court) to pass orders”, a bench headed by Chief Justice N V Ramana said.
- Reserving the order: The apex court on February 3 had reserved its order on the plea of FRL seeking continuation of the merger deal process before the NCLT. The bench comprising of Chief Justice of India, Justices A S Bopanna and Hima Kohli, said that the high court should consider the plea of FRL on the issue without being influenced by the observations made in its the issue without being influenced by the observations made in its order.
- Delhi High Court order set aside: Prior to this, the apex court, in a verdict on February 1, had set aside three Delhi High Court orders including attachment of properties of FRL and its directors and the refusal to grant a stay on the final arbitral award which had restrained FRL from going ahead with its Rs 24,731 crore merger deal with Reliance Retail and had ordered fresh adjudication.
- Arguments of Future: The top court took note of the submissions that out of total 15 stages required for finalisation of a merger deal, the NCLT has reached at 8 one stage pertaining to meeting of the shareholders and creditors. It was reported in Business world Senior advocate Harish Salve, appearing for the Future group, had argued that it would take six to eight months to complete the entire process and for actual sanctioning of the scheme by the NCLT. Another trivial issue in the fierce battle is that of the livelihood of 22,000 employees of FRL are also at stake and continuation of the NCLT proceedings will not adversely affect Amazon in any manner, the FRL had said before court.
- Initiation of the legal battle in Singapore: Amazon had dragged Future Group to arbitration at SIAC in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance Retail. The SIAC, in the EA, had granted relief to Amazon by restraining the Future group from going ahead with the FRL-Reliance Retail merger deal. On October 21 last year, a duly-constituted panel of arbitrators at the SIAC reiterated the EA’s decision.
- Three member Arbitral Tribunal: Following the EA, subsequently, a three-member arbitral tribunal was constituted to decide the issues arising from the deal. Subsequently, the arbitration tribunal under the SIAC rejected on October 21 last year, the FRL plea to lift the interim stay granted by its EA on October 25, 2020, observing that ”the Award was correctly granted”.
- Earlier order of the Delhi High Court: The March 18, 2021 order of the high court, upholding the EA’s award, imposing a cost of Rs 20 Lakh on it as well as its directors and attaching their properties, was also set aside by the top court which remanded the pleas of Future group firms relating to arbitral award on the merger deal with Reliance Retail back to the Delhi High Court. It had also quashed the October 29, 2021 order of the high court declining a stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the Singapore International Arbitration Centre (SIAC). The EA had restrained FRL from going ahead with the merger deal.
- FRL AND FCPL moves Supreme Court: The FRL and FCPL had moved the top court against the high court order of August 17, 2021, which said that it would implement the earlier order by its single-judge restraining FRL from going ahead with the deal in pursuance of the EA’s award (PTI)
- Directions of the Supreme Court:On September 9 last year, the apex court had stayed for four weeks all proceedings before the high court concerning the implementation of the EA and also directed statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI), and Securities and Exchange Board of India (Sebi) not to pass any final order related to the merger deal in the meantime.
- Approach to High Court: On October 29, 2021, the Delhi High Court declined Future Group’s plea for a stay on the arbitration tribunal. The high court sought a response from Amazon which had challenged the merger before the SIAC and listed the appeals by FCPL and FRL for further hearing on January 4, 2022.
HON’BLE MR JUSTICE N V RAMANA
Judge Supreme Court of India
HON’BLE MS JUSTICE HIMA KOHLI
Judge Supreme Court of India
HON’BLE MR JUSTICE BOPANNA
Judge Supreme Court of India
