Future Retail moves SC against HC order on its Rs 24,713 crore Reliance deal

Kishore Biyani-led Future Retail Ltd on Saturday moved the Supreme Court against orders passed by the Delhi High Court to maintain the status quo regarding the company’s merger with Reliance Retail. The SC had earlier ruled against Future Retail Ltd in the case filed by Amazon against the deal. Putting a stay on the Rs 24,713 crore deal, the SC had directed to enforce the order of the Singapore-based Emergency Arbitrator.

FRL pleads against halt on deal with Reliance

Future Retail, in a regulatory filing, said, "Please be informed that the company has filed a special leave petition before Hon'ble Supreme Court of India against the impugned orders dated 2nd February 2021 and 18th March 2021 passed by 'Ld. Single Judge'...The SLP will be listed for hearing in due course." The petition also claimed that the "there is extreme urgency to hear" and "stay the Impugned Orders" passed by the single-member bench of Delhi High Court, failing to which the company would go into liquidation.

Future Retail, in its petition, stated that the scheme of amalgamation cannot go through due to the orders of the High Court. The company went on to claim that the scenario would cause serious loss for all parties involved. ".... and as a result of which the Scheme which benefits all the stakeholders, including the public at large and various public sector banks, may fall through; If the Scheme falls through, it is inevitable that FRL will go into liquidation," it said.

Besides "approximately Rs 28,000 crore of public money in the form of bank loans and debentures issued by FRL and its group companies is also be at risk," the Future group added in its appeal. The company also claimed that the magnitude of the damage that the event might cause was “unimaginable” and informed the court that the firm has more than 35,575 employees depending on it. "The solvency of over 8,050 SMEs (excluding SMEs of Future Enterprises Limited) and their employees is at stake,” the petition informed.

SC upholds halting of Future Group-Reliance deal

Earlier on August 6, the Supreme Court ruled that the Emergency Award stalling the Future Retail Ltd's merger deal with Reliance Retail is enforceable in Indian law. A bench comprising Justices RF Nariman and BR Gavai delivered its verdict on the e-commerce giant's plea challenging the Delhi High Court division bench's order dated March 22. This order had stayed a single-judge order which upheld Singapore's Emergency Arbitrator Award halting the Rs.24,731 crore FRL-Reliance Retail deal. 

In August 2020, the Future Group reached an agreement to sell its retail, wholesale, logistics, and warehousing units to Reliance. Thereafter, Amazon took FRL into Emergency Arbitration before the Singapore International Arbitration Centre (SIAC) for the alleged breach of contract between them. The SIAC passed an interim order in favour of the US-based company on October 25, 2020, barring FRL from taking any steps to dispose of its assets or securing funding from any restricted party. This was followed by Amazon urging the SEBI, Competition Commission of India and stock exchanges to take into consideration this interim decision. 

Subsequently, Amazon moved the Delhi HC seeking the enforcement of this order and sought the detention of the Biyanis, the directors of FRL and Future Coupons Private Ltd in prison. Moreover, it sought attachment of their properties for their "willful disobedience" of the Emergency Arbitration Award. While Justice JR Midha of the Delhi HC directed FRL to maintain the status quo on its deal with Reliance Retail in an interim order passed on February 2, the division bench of Chief Justice DN Patel and Justice Jasmeet Singh stayed it on February 8 and allowed FRL to seek clearances from the regulatory authorities. 

(IMAGE: PTI/ SHUTTERSTOCK)