The Supreme Court Tuesday set aside three Delhi High Court orders including the refusal to grant a stay on the final arbitral award which had restrained Future Retail Ltd from going ahead with its Rs 24,731 crore merger deal with Reliance Retail and ordered fresh adjudication.
In a major relief to Future group, a bench headed by Chief Justice N V Ramana also set aside the high court’s order of February 2 last year, by which it had directed Future Retail Ltd (FRL) to maintain status quo in relation to the merger deal.
The top court also quashed the October 29, 2021 order of the high court declining a stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the Singapore International Arbitration Centre (SIAC). The EA had restrained FRL from going ahead with the merger deal. The bench, which also comprised Justices A S Bopanna and Hima Kohli, remanded the pleas of Future group firms relating to arbitral award on the merger deal with Reliance Retail back to the Delhi High Court.
“We set aside the impugned orders dated February 2, 2021 and March 18, 2021 and other impugned order dated October 29, 2021. We direct the learned (HC) judge to consider issue and pass an order on its own merits uninfluenced by observations,” the bench said in its order.
The CJI said he would request the Chief Justice of the Delhi High Court to set up a bench for speedy disposal of the case. US e-commerce major Amazon has been opposing the Future group decision to go ahead with the merger deal of FRL with Reliance Retail.
The US firm got the EA of SIAC in its favour which restrained Future group from going ahead with the merger deal. The EA award was upheld in the final arbitral award of October, 2021. The top court, on January 11, had reserved its judgement and said that it wanted to send the case back to the Delhi High Court to render a finding on the enforceability of the SIAC award restraining FRL's sale of assets to Reliance Retail.
The apex court reserved its order on two sets of petitions filed by FCPL (Future Coupons Private Ltd ) and FRL (Future Retail Ltd). One set of appeals challenged the March 18 order of the Delhi High Court which besides restraining FRL from going ahead with its deal with Reliance Retail, had imposed costs of Rs 20 lakh on the Future Group and others associated with it and ordered attachment of their properties.
The second set of appeals has been filed against the Delhi High Court's recent order declining its plea for stay on an arbitration tribunal decision refusing to interfere with the SIAC's EA, which restrained it from going ahead with the Rs 24,731 crore merger deal with Reliance Retail.
During the hearing on January 11, senior advocates Harish Salve and Mukul Rohatgi had appeared for FRL and FCPL respectively and the US e-commerce major was represented by senior lawyers Gopal Subramanium and Ranjit Kumar, and others.
Salve had said for the merger deal to go ahead the adverse orders passed last year on February 2 and March 18 have to be quashed. He said FRL will "sink with 30,000 employees losing their jobs" if the deal with RRL does not go through. The FRL and FCPL had said that they are allowed to go forward with the interlocutory proceedings of the scheme with Reliance to ensure that they would be able to finalise the deal once the dispute with Amazon is concluded.
On September 9 last year, the apex court had stayed for four weeks all proceedings before the high court concerning the implementation of the EA and also directed statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI), and Securities and Exchange Board of India (Sebi) not to pass any final order related to the merger deal in the meantime.
Amazon had dragged Future Group to arbitration at SIAC in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance Retail. The SIAC, in the EA, had granted relief to Amazon by restraining the Future from going ahead with the Rs 24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail.
On October 21 last year, a duly-constituted panel of arbitrators at the SIAC reiterated the EA's decision. On October 29, 2021, the Delhi High Court declined Future Group's plea for a stay on the arbitration tribunal. The high court sought a response from Amazon which had challenged the merger before the SIAC and listed the appeals by FCPL and FRL for further hearing on January 4, 2022.
Kishore Biyani and 15 others including FRL and FCPL have been embroiled in a series of litigations with Amazon, an investor in FCPL, over the deal with Reliance. Following the EA, subsequently, a three-member arbitral tribunal was constituted to decide the issues arising from the deal. Subsequently, the arbitration tribunal under the SIAC rejected on October 21, last year, the FRL plea to lift the interim stay granted by its EA on October 25, 2020, observing that "the Award was correctly granted".
The FRL and FCPL had moved the top court against the high court order of August 17, 2021, which said that it would implement the earlier order by its single-judge restraining FRL from going ahead with the deal in pursuance of the EA's award. On August 6 last year, the Supreme Court gave the verdict in favour of Amazon and held that the EA award, restraining the Rs 24,731 crore FRL-Reliance Retail merger deal, is valid and enforceable under Indian arbitration laws.
The apex court had also set aside the two orders of February 8 and March 22, 2021, of the division bench of the Delhi High Court order which had lifted the single judge's orders staying the FRL-RRL merger. A bench headed by Justice R F Nariman, since retired, had dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.
With inputs from PTI.
