And now, Amazon gets SC to stay Future-Reliance deal
23 February 2021
The Supreme Court on Monday issued notices to Future Retail Limited and Reliance Industries Ltd on a plaint filed by Amazon Investment Holdings challenging the Delhi High Court order which had lifted a stay order on the Future- Reliance deal passed earlier by a single judge of the court.
A bench headed by Justice Rohinton Nariman also ordered that while the proceedings before National Company Law Tribunal (NCLT) can go on, it should not arrive at any final order of sanction of the scheme.
"Issue notice. Dasti in addition. To come up after three weeks. Rejoinder to be filed two weeks thereafter. List thereafter. Meanwhile, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme," the Court ordered.
The apex court also made directed the division bench of Delhi High not to proceed with the matter further.
"Obviously, show them this order. We don't need to say that (specifically)," the bench said.
Amazon moved the Supreme Court challenging the order passed by the division bench of the high court in an appeal filed by Future Retail Ltd (FRL) against the status quo order passed by a single-judge bench of Justice JR Midha.
Amazon had filed a Special Leave Petition before the Supreme Court seeking enforcement of the Emergency Award passed under Section 17(2) of the Arbitration & Conciliation Act.
Amazon has contended that the division bench order is illegal, and arbitrary apart from being without jurisdiction.
"...the Hon’ble High Court failed to appreciate the fact that FRL could not have preferred the Appeal under Order XLIII Rule 1(r) of the CPC read with Section 13(1) of the Commercial Courts Act, 2015, thereby challenging an order issued under Section 17(2) of the Act."
It has also been contended that the division bench hastily passed the impugned order without waiting for the detailed order of the single-judge and without appreciating the “Group of Companies” doctrine.
"It is submitted that the Hon’ble High Court, while issuing the Impugned Interim Common Order, failed to appreciate that the Single Judge Order was issued by the Single Judge of the Hon’ble High Court for the limited purpose of preserving the rights of the parties till the pronouncement of the final orders and after coming to the conclusion that the Respondents have violated the directions contained in the EA Order including on the basis of the Respondents’ own unequivocal submission that would not maintain status quo," the plea states.
Amazon has further argued that FRL has acted in complete disregard of the rule of law and procedure prescribed by law and that a collateral challenge to an Emergency Award cannot be permitted.
While lifting the stay on Future-Reliance deal, the division bench of the Delhi High Court had opined that FRL was not a party to an arbitration agreement with Amazon and prima facie the "Group of Companies" doctrine could not be invoked.
Further observing that there was no reason to seek a status quo order from the single-judge, the division bench stated that statutory authorities like Sebi, CCI should not be restrained from "proceeding in accordance with law".
Senior advocate Harish Salve, representing Future, told the bench that the high court has kept the appeal for further hearing on Friday this week.
"The NCLT (proceedings) is only for calling meetings. The question of NCLT considering this application is much later and Amazon has interfered there. Staying proceedings at NCLT may unnecessarily delay without any corresponding benefits," said Salve.
The Bench, however, said that it will not delay things at all.
"The subject matter is whether the amalgamation goes through or not. At the interim stage, you cannot turn around and vacate an order without any reasons having been given," Justice Nariman said.
Adjourning NCLT proceedings will only delay the FRL meeting which will be pushed by another 6 weeks, Salve maintained.
The Court then said that it will pass an order that proceedings before NCLT can go on without any final order being passed on amalgamation.
The Court also clarified that separate proceedings before a division bench arising from the observations made by another single-judge of Justice Mukta Gupta in the case filed by Future against Amazon will also continue.