On Thursday, the Supreme Court stayed proceedings in the dispute between Future Group and Amazon over a nearly ₹25,000-crore merger deal with Reliance Retail taking into consideration the “balance of interests of both parties”.
A three-judge Bench led by Chief Justice of India N.V. Ramana, while issuing notice, ordered statutory authorities, including the company law tribunals, the Competition Commission of India and the Securities and Exchange Board of India to not pass any orders in matters connected to the dispute for the next four weeks.
When one of the lawyers raised apprehension about the period of four weeks, the CJI indirectly drew attention to the depleted manpower in tribunals.
“Do you think any company law tribunal is in a position to take up any matter… I am sorry to say,” Chief Justice Ramana asked.
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The court’s stay order and subsequent freeze on any action by statutory authorities for the next four weeks come as a relief for the Future Group, which had moved the apex court to stay an order passed by the Delhi High Court to attach the assets of Future Coupons, Future Retail and Future Group promoter Kishore Biyani.
A Single Judge of the Delhi High Court had ordered the attachment of assets in March. It had directed the Future group firms and promoters to file their affidavits giving details of their assets for violating an Emergency Arbitrator award.
On August 6, the Supreme Court ruled in favour of e-commerce giant Amazon against the proposed ₹24,713-crore merger deal between Future Retail Limited and Reliance Retail.
A Bench of Justices Rohinton F. Nariman and B.R. Gavai had upheld the validity and enforceability of a Singapore-based Emergency Arbitrator (EA) award, which restrained Future Retail Limited (FRL), India’s second-largest offline retailer, from going ahead with the disputed transaction.
The EA, in an award in October last year, had injuncted FRL “from taking any steps to complete the disputed transaction with entities that are part of the MDA Group.”
The judgment authored by Justice Nariman had dismissed FRL’s argument that the “Emergency Arbitrator is not an arbitral tribunal” under the Arbitration and Conciliation Act of 1996.
The August 6 judgment saw the apex court record that the Mukesh Dhirubhai Ambani Group, which owns Reliance Retail, was among the “restricted persons” or “prohibited entities” with whom FRL, Future Coupons Private Limited, which owns 9.82% shareholding in FRL, and the Biyanis could not “deal”. This was according to agreements based on which Amazon would invest money.
Despite these agreements, the apex court had noted that FRL entered into a transaction with the Mukesh Dhirubhai Ambani (MDA) Group. The deal envisaged “the amalgamation of FRL with the MDA Group, the consequential cessation of FRL as an entity, and the complete disposal of its retail assets in favour of the group”.
The 103-page judgment authored by Justice Nariman had dismissed FRL’s argument that the “Emergency Arbitrator is not an arbitral tribunal” under the Arbitration and Conciliation Act of 1996.
Besides, Justice Nariman had observed that a party (FRL) “cannot be heard to say, after it participates in an Emergency Award proceeding, that it will not be bound by an Emergency Arbitrator’s ruling”. The apex court had said EA orders were “an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties”.