Biyani gets a breather in tussle with Amazon
Top court restrains Delhi high court from passing any adverse directive
NEW DELHI: The Supreme Court on Thursday restrained the Delhi high court from passing any adverse directive against Future Group’s $3.4 billion sale of retail assets to Mukesh Ambani’s Reliance Industries Ltd (RIL) and on attaching the assets of Future group chairman Kishore Biyani and other directors.
While staying the enforcement proceedings before the high court, a bench headed by Chief Justice of India NV Ramana, also directed that no statutory authority in the country will give its final approval to any scheme facilitating the FutureReliance deal for the next four weeks.
The apex court’s ruling comes as a breather for Future. On August 6, after the Supreme Court upheld an emergency arbitrator’s interim order in favour of Amazon, the latter approached the Delhi high court regarding the enforcement of its (the Delhi high court’s) own March order.
In response, the Delhi high court instructed Future Group that unless the Supreme Court stayed the matter it would act on it.
On Thursday, the SC bench, which also included justices Surya Kant and AS Bopanna, observed that the order was being passed to strike a balance between the competing interests of Future Group and Amazon.com.Inc, which is seeking to stop the former’s deal with Reliance.
“To balance the interest of the parties, we stay all further proceedings before the Delhi high court for the time being and direct that all authorities, including NCLAT, CCI and Sebi, not to pass any final order for a period of four weeks. List after four weeks”, the bench stated in its order.
Expressing displeasure at the Delhi HC’s order, the bench observed: “We must be fair. In a matter of this magnitude, if hearing takes place without giving an opportunity of filing proper counter affidavit to parties, how can one pass orders like attaching property, pay cost, civil imprisonment etc? What is this!”
It also took note of the proceedings pending before the Singapore International Arbitration Centre (SIAC) and recorded that the interim order was passed with the consent of both the parties which await a judgment from the arbitral tribunal.
Senior advocates Harish Salve and Mukul Rohatgi, appearing for the Future group companies, and senior counsel Gopal Subramanium, representing Amazon, agreed to record their consent to the court order.
During the proceedings on Thursday, the bench did not find favour with the manner in which the single judge bench of the Delhi HC had, by a March 18 order held Kishore Biyani and other directors guilty for going ahead with the deal and had issued a show-cause notice to him and other directors as to why they should not be sent to prison, as sought by Amazon.
It remarked that the single judge went beyond the scope of the enforceability of the Singapore-based emergency arbitrator (EA) award in favour of Amazon. “If he has confined himself to the EA award, it was okay but he has gone over and above that,” observed the bench, adding how orders on sending someone to jail could be issued in this fashion.
Subramanium, on his part, replied that Amazon was not seeking to send anyone to jail but the other side must also show some respect to the EA order passed in October 2020.
According to Subramanium, the single judge was only enforcing the injunctions granted by the EA but the coercive orders were in fact invited by Future Group which took steps in violation of the injunction and continued to perpetuate the breach by obtaining various regulatory approvals for the deal. He conceded that Amazon’s stand is that the SIAC should decide the matter without getting influenced by the order of the single judge.
But the bench was emphatic that the high court could not be allowed to proceed with the enforcement of its directions, which included stalling the deal with RIL; attachment of directors’ assets; facing a jail term for disobeying the court orders; and withdrawing all pleas from different fora on approvals.
At this stage, Salve pointed out Future Group may be allowed to take some procedural steps in the matter that will not affect Amazon’s interest.
“We are making it clear...no action to be taken by any statutory authority. No authority will make any order for four weeks,” retorted the bench.