FRL-Reliance merger: Supreme Court notice to Future group on plea of Amazon

New Delhi: The Supreme Court Wednesday sought a response from the Future group on Amazon's plea against the January 5 order of the Delhi High Court staying the ongoing arbitration proceedings before an arbitral tribunal over Future Retail's Rs 24,500-crore merger deal with Reliance.

A bench comprising Chief Justice N V Ramana and Justices A S Bopanna and Hima Kohli issued notices to the Future group firms, Future Coupons Private Ltd (FCPL) and Future Retail Ltd (FRL) and said that it will hear the matter on February 23 “without any adjournment”.

The Delhi High Court on January 5 had stayed the Amazon-Future arbitration which is going on before a three-member arbitral tribunal over the latter's Rs 24,500-crore deal with Reliance.

During the brief hearing, the CJI expressed displeasure over some media reports on his remarks made on Tuesday while declining US-based e-commerce major Amazon's request to file written submission in another case field by FRL seeking a nod to proceed with the National Company Law Tribunal (NCLT) permission of going ahead with the merger.

The bench had observed on Tuesday that it appeared to be a “luxurious litigation".

While issuing the notice on the fresh plea of Amazon on Wednesday, the CJI said, “I am sorry to say that papers are unnecessary highlighting whatever we observed, but this is also the same, the other side (Future), they don't want matters should go on."

The bench issued notice on the plea of the US firm even before senior advocate Gopal Subramanium, appearing for Amazon, started the submissions on the plea filed against the high court's January 5 order.

Senior advocate Mukul Rohatgi, appearing for Future group, said that let the matter be kept for hearing on February 23 as senior lawyer Harish Salve, who also appears for the Future group firm, was unavailable.

Rohatgi said that NCLAT would hear next week the Amazon plea against the Competition Commission of India (CCI) order which had revoked its sanction for the deal with Future Group.

He also said that the high court has decided to hear in the third week of March the batch of pleas of FRL and others on the refusal to grant a stay on the final arbitral award which had restrained FRL from going ahead with its merger deal with Reliance Retail.

Amazon and the Future Group have been locked in a legal tussle after the US e-commerce giant dragged the latter to arbitration at the Singapore International Arbitration Centre in October 2020.

The fresh plea, on which the apex court issued notice, has been filed by the US firm assailing the January 5 order of a division bench of the Delhi High Court staying the Amazon-Future arbitration which is going on before a three-member arbitral tribunal.

The division bench of the high court had also stayed a single judge's January 4 order dismissing the Future Group's two pleas seeking a direction to the arbitration tribunal to decide on its application for terminating the arbitration proceedings before moving further.

The high court had said that there was a prima facie case in favour of FRL and FCPL and if a stay is not granted, it will cause an irreparable loss to them.

Amazon argued that FRL violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani's Reliance Retail on a slump sale basis for Rs 24,500 crore.

In December last year, the Competition Commission of India suspended its over-two-year-old approval for Amazon's deal to acquire a 49-per cent stake in FCPL and FRL promoter, and also slapped a penalty of Rs 202 crore on the e-commerce major.

Amazon has been objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008 and is engaged in the business of marketing and distribution of gift cards, loyalty cards and other reward programmes to corporate customers.

In October last year, the high court had declined to stay the arbitral tribunal's order refusing to interfere with the Emergency Award (EA), which restrained Future Group from going ahead with the deal with Reliance.

The apex court on February 3 had reserved its order on a plea of FRL seeking a nod to proceed with the NCLT permission of going ahead with the merger deal with Reliance Retail.

Besides this, FRL has filed a separate plea in the apex court against the consortium of 27 banks seeking a direction that no coercive action be taken against it for a certain time period due to non-payment of debt.

The consortium of lending banks had told the Supreme Court that the money lent to FRL belonged to the depositors and to safeguard the “public interest”, the entire assets of FRL can be subjected to open bids by Amazon and Reliance with a reserve price of Rs 17,000 crore.

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 the merger deal with Reliance Retail and had ordered fresh adjudication.