Supreme Court asks Future Retail to move Delhi HC on NCLT proceedings
The Supreme Court has granted Future Retail the option to seek from the Delhi High Court permission to continue proceedings at the National Company Law Tribunal (NCLT) on its deal with the Reliance Industries group.
It also asked the high court to give orders uninfluenced by any observations of the Supreme Court. Chief Justice of India N V Ramana, Justice A S Bopanna and Justice Hima Kohli heard the case.
Meanwhile, the high court has listed the hearing of four cases in the legal battle between Future Group and e-commerce major Amazon on February 24. The court will hear Future Retail’s plea, along with four other cases.
The four are the Singapore International Arbitration Centre’s (SIAC’s) emergency award, which stalled Future Group’s deal with Reliance Retail, and the SIAC’s tribunal order, which upheld the emergency award.
There is also Amazon’s case of the Enforcement Directorate (ED) issuing summons to it on violating the Foreign Exchange Management Act while investing in Future Coupons in 2019. Also Amazon had challenged the high court’s observations in its order in December 2020.
“The direction of the Supreme Court to send the matter to the high court is based on the reasoning that principles of natural justice were not adhered to when the order was passed. Both parties will have to be heard and new orders are required to be passed after giving a proper opportunity of hearing. But the high court is free to decide the case on its own merit after considering the evidence and the legal principles,” said Ashish K Singh, managing partner, Capstone Legal.
The National Company Law Appellate Tribunal on February 25 will hear Amazon’s plea seeking an interim stay on the order passed by the Competition Commission of India (CCI), which suspended the more than two-year-old approval of its deal with Future Coupons (FCPL).
The legal battle between Future Group and Amazon started in October 2020 after the former decided to sell its retail, logistics, and warehousing businesses to Reliance Retail, a subsidiary of Reliance Industries. The move by Amazon comes because in August 2019, the US e-commerce major acquired a 49 per cent stake in Future Coupons, the promoter entity of Future Retail, for about Rs 1,500 crore.
After the Future-Reliance deal, Amazon approached the SIAC in October 2020 and an emergency arbitration interim order was passed, upholding the position of Amazon. The order directed the Future Group entities not to proceed with the transactions with Reliance Retail.
In November 2020, Future Group challenged the SIAC’s interim order at the Delhi High Court and in February 2021, a single-judge Bench order upheld the SIAC’s interim order. Future Group then filed an appeal at the Delhi High Court before a Divisional Bench, challenging the single-judge Bench order. The Divisional Bench stayed the single-judge Bench’s order.
In February 2021, Amazon moved the Supreme Court, challenging the Divisional Bench order, and Future Group moved the NCLT Mumbai to seek approvals to go ahead with its deal with Reliance Retail.
In March 2021, the Delhi High Court passed an order to attach Future Group’s assets. A Divisional Bench stayed it.
In August 2021, the apex court had ruled in favour of Amazon, holding the SIAC’s arbitration award. In September 2021, in a major relief to Future Group, the Supreme Court stayed proceedings before Delhi High Court, ordering no coercive action against the Kishore Biyani-led group. The court also directed the NCLT, CCI, and Securities and Exchange Board of India not to pass any final order in relation to the dispute for four weeks.
In October 2021, the SIAC tribunal upheld the emergency arbitration interim order, thereby injuncting Future Retail from taking any steps to merge itself with Reliance Retail. Future Group then approached the Delhi High Court but a single-judge Bench refused to stay the arbitral tribunal order.
In December 2021, the CCI suspended Amazon’s 2019 deal with Future Coupons and imposed a penalty of Rs 202 crore on it.
In January this year, a single-judge Bench of the Delhi High Court passed an order dismissing Future Group’s plea to stop arbitration proceedings initiated by Amazon in Singapore. But a Divisional Bench of the court ordered a stay on the Amazon-Future arbitration going on before a three-member arbitral tribunal.
In February, the Supreme Court set aside verdicts of a single-judge Bench of the Delhi High Court which ordered strong steps against Future Group and also the order which refused to stay the Singapore tribunal’s refusal to vacate the emergency award. The Supreme Court sent the matter to the Delhi High Court.
In February, Future Retail filed a writ petition in the Supreme Court against its lenders, seeking to restrain them from classifying it as a non-performing asset. On February 4, Future Group sought two weeks to come up with a solution with the lenders.
