Future-Reliance deal: SC stays proceedings in Delhi HC, asks NCLT, CCI, SEBI not to pass final orders

The Supreme Court on Thursday stayed all proceedings on Future group’s appeals against the Delhi High Court’s single judge order, which had in February restrained it from going ahead with its Rs 24,713-crore merger deal with Reliance Retail on a plea by Amazon.

A three-judge bench presided over by Chief Justice N V Ramana directed stay on all further proceedings before the Delhi High Court and all other authorities CCI, NCLT and SEBI and restrained them from passing any final order for four weeks.

The court fixed the matter for hearing after 4 weeks, awaiting the Singapore International Arbitration Centre’s emergency arbitrator’s decision on Future's objection to proceedings by Amazon.

The top court passed the order after hearing detailed arguments by senior advocates Harish Salve and Mukul Rohatgi for Future group and senior advocate Gopal Subramanium for the Amazon.

Both the parties agreed for listing of the matter after four weeks.

Future group claimed that the single judge had given a slew of directions (on February 2 and March 18) that went beyond the emergency arbitrator’s (EA) last year’s order.

The HC order if implemented will have far reaching consequences.

It sought stay on the order, saying that the entire assets have been ordered to be attached by the High Court and the contempt proceedings would be initiated if the order is not suspended.

Notably, the development comes after the Supreme Court's August 6 order by which Amazon scored a major victory with the apex court upholding EA's award restraining FRL from going ahead with its deal with the Mukesh Ambani firm.

It had also revived the single judge’s order that had also held FRL group chairman Kishore Biyani and others guilty for going ahead with the deal and had issued show cause notice to him and other directors of the Future Group as to why they should not be sent to prison, as sought by Amazon.

Besides, the single judge had also directed the FRL to approach regulatory authorities to recall all approvals granted to the Future-Reliance Retail deal and to deposit 20 lakh as cost for violating the Singapore's Emergency Arbitrator's interim stay order of October 25, 2020. The judge had also asked for attaching the assets of Biyani and other directors and had asked them to appear before it.

Challenging the single judge’s February 2 and March 18 orders, the Future group and Biyanis in their appeals before the apex court said that the single judge’s directions were not only beyond the EA’s order but also beyond the reliefs sought by Amazon in its enforcement petition.

The fight between Future Group and Amazon has been going on since October 25, 2020 when the Singapore's Emergency Arbitrator passed an interim order restraining FRL from going ahead with its deal with Reliance Retail. Amazon, which acquired an indirect minority stake in Future Group in 2019 has alleged that Future's sale of its retail, wholesale, logistics and warehousing businesses to Reliance Retail breached its pre-existing contract, which included a right of the first offer and a non-compete clause.

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