Future-RIL deal: Delhi HC order not to hinder NCLT proceedings, says Future Retail
BusinessToday.In March 19, 2021
A day after the Delhi High Court restricted Future Retail from going ahead with the Rs 24,713-crore deal with Reliance Industries, the Kishore Biyani-led company said that the judgement will not hinder the proceedings before company law court in the matter.
On Thursday, the single-judge bench of Justice JR Midha pronounced its detailed order on a plea by Amazon challenging the acquisition deal between Future Retail and Reliance Retail, basis an order by Singapore's Emergency Arbitrator. This judgement provided reasons for the ad-interim order passed in the matter on February 2.
The latest Delhi High Court order also barred the deal from progressing, ordered penalties against Biyani and others as well as attachment of their properties, and issued a show cause as to why they should be incarcerated in civil prison for "wilfully" neglecting the arbitration.
The court imposed a cost of Rs 20 lakh on Future Group as well as its directors and directed them to deposit the amount in Prime Minister's Relief Fund within two weeks for being used for providing COVID-19 vaccination to senior citizens of Below Poverty Line (BPL) category of Delhi.
However, this order will not have any impact on the proceedings related to the deal between Future and Reliance currently ongoing at National Company Law Tribunal (NCLT), Future Retail stated.
"It is to be pointed out that the portions of the operative part of this detailed order, already covered by the ad-interim order dated February 2, 2021, have been stayed by the Division Bench of Delhi High Court in an appeal filed by Future Retail Limited in which the Division Bench prima facie came to certain conclusions. Amazon has filed an appeal in the Supreme Court against the order passed by the Division Bench," the company said.
"The Supreme Court, in its order in Amazon's appeal, has not vacated the stay granted by the Division Bench (which stay is still in operation). The Supreme Court has directed that, in the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme," it further added.
We are advised that this order does not come in the way of continuance of the ongoing NCLT proceedings, being inconsistent with the order dated February 22, 2021, of the Supreme Court, Future Retail stated.
The company also said that its promoters will take appropriate remedies with respect to other directions passed by the Delhi High Court.
On August 29, 2020, Future Group had announced that its retail and wholesale business, Future Retail Limited, would be sold to Reliance Retail, the retail arm of Reliance Industries, in a Rs 24,713 crore deal.
In October 2020, Amazon dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC), arguing that Future violated the contract by entering into the deal with rival Reliance.
On October 25, 2020, an interim award was passed in favour of Amazon with a single-judge bench of V K Rajah barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Future Group, however, turned to Indian regulators to secure approval for its deal with Reliance. The Future-Reliance deal has already received clearance from CCI, SEBI and bourses, and the scheme of arrangement is now awaiting the nod from the NCLT and shareholders.
On January 25, Amazon had approached the Delhi High Court seeking enforcement of the interim order of the Emergency Arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) that had restrained FRL from going ahead with the deal with Reliance.