Topcourt bars NCLTfrom approving FRL-RIL deal
Delhi HC shall not proceed with the case any more since SC has already admitted Amazon’s appeal, ruled the top court
NEW DELHI: The Supreme Court on Monday restrained the National Company Law Tribunal (NCLT) from approving the ₹24,713 crore deal between Kishore Biyani’s Future Retail Ltd and Reliance Industries Ltd for the sale of the former’s retail assets, as the top court admitted a petition by Amazon.com Inc against the arrangement.
Granting an interim order in favour of e-commerce giant Amazon, the SC made it clear that the NCLT’s Mumbai bench shall not sanction the scheme to pave the way for the FRL-RIL deal even if Future Group holds any meeting of its creditors and shareholders to endorse the planned sale.
The SC bench of justices Rohinton F Nariman and BR Gavai also issued notices to the Future group companies and the Biyanis, fixing the matter for the next hearing after three weeks.
Future Retail’s scheme of arrangement has already received approval from the antitrust regulator Competition Commission of India and raised no objection from the Securities and Exchange Board of India (Sebi), following which it had
approached NCLT, Mumbai on January 26, 2021. The SC order on Monday put a spoke in the wheel.
The latest order comes as a shot in the arm for Amazon, which has sought to stop the Future Group-Reliance Industries deal, citing the Singapore International Arbitration Centre’s (SIAC) interim award in October last year that barred the Biyani group company from taking any step to sell its assets or issuing any securities to raise any funding from a restricted party.
A spokesperson for Amazon declined to comment on the order because the matter is sub judice.
Future Group had been
caught in a fight between Amazon and Mukesh Ambani’s RIL for domination of the Indian retail market that is estimated to reach $1.3 trillion by 2025.
The SC bench on Monday also observed that the division bench of the Delhi high court shall not proceed with this case anymore since the Supreme Court has already admitted Amazon’s appeal. The case is listed before the high court on Friday.
“According to us, this order (of the high court) seems to have decided the main appeal let alone be just the maintainability at the interim stage itself. At the interim stage, you can’t vacate a stay order without giving adequate reasons...It is obvious they (high court) cannot hear it. You (Amazon’s lawyers) show them our order,” said the bench, critical of the high court’s February 8 order that had overturned a previous directive to halt the Future Retail-Reliance Industries deal.
During the hearing, Amazon, through senior advocates Gopal Subramanium and Ranjit Kumar, sought restoration of the status quo on the deal till the time several legal issues relating to it were finally decided by the apex court. They also pointed out that the scheme of arrangement for the Future Retail -Reliance Industries deal was now awaiting a nod from the NCLT and shareholders and therefore, an interim order of restraint was imperative.
As the bench was inclined to stay all proceedings before the NCLT, senior advocate Harish Salve, representing Future Retail, argued that there was no possibility of the NCLT passing any final order of approval in the present circumstances. He added that even if that meeting to consider the deal was to be convened, it will not happen before six weeks and hence, proceedings before the NCLT were not required to be stayed at present. At this, the bench agreed to pass an interim order to the effect that the “NCLT proceedings will be allowed to go on but will not culminate in any final order on sanction of scheme” till the matter is finally decided by it. The court asked Future Retail and the Biyanis to file their replies to the Amazon’s petition in three weeks, following which Amazon would get two weeks to submit its response to their contentions.