SC asks if it can pass orders to halt alienation of FRL assets

NEW DELHI: The Supreme Court on Friday asked if it can pass any interim order on a plea of Amazon that Future Retail Ltd’s (FRL) assets including ’Big Bazaar shops’ not be alienated till the dispute over its merger with Reliance Retail is decided by the arbitral tribunal.

A bench headed by Chief Justice N.V. Ramana, which has posted the plea of the US e-commerce major for further hearing on April 4, said the landlords of the FRL’s shops are not before it and the question is if such an order restraining the alienation of assets till conclusion of arbitration can be passed.

“If tenants or landlords are not before us how can the court pass an order injuncting them from taking possession (of shops)?” asked the bench which included Justices Krishna Murari and Hima Kohli.

There is no difference of opinion between Amazon and Future G roup as far as resumption of the arbitration proceedings are concerned, said senior advocate Gopal Subramanium, appearing for the US firm.

“But there cannot be sudden handover of assets,” Subramanium said. The US firm needs an interim order “against alienation of the assets in favour of any other party and assets must remain with FRL and operate with FRL until the matter is resolved by the arbitral tribunal”, he said. More than 800 FRL shops have been taken over by the Reliance group, he said.

Around 374 shops are with FRL and it is not going to give them to anybody on its own unless some landlords throw it out, said senior advocate Harish Salve, appearing for FRL.

“My bank accounts are frozen I can’t pay rent. Everyone is hoping if scheme gets through Reliance comes in and everyone will get the money,” he said. There is no money to pay the rent and if lending banks come in the Insolvency and Bankruptcy Code will come into the picture.

Senior advocate Rakesh Dwivedi,

appearing for lending banks of Future Group, also pleaded that no interim order that is prejudicial to the interests of the banks be passed in the matter.

Prior to this, Amazon had apprehended the “disappearance” of assets and sought an interim order from the top court to ensure the preservation of assets of FRL besides resumption of arbitration over FRL’s merger deal with Reliance Retail. The bench had taken note of the allegations of the US firm that the “applecart was being upset” by its rivals and asked FRL and Future Coupons Pvt Ltd (FCPL), to respond to the interim plea of Amazon.

Amazon and Future group are engaged in multi-forum litigation on the issue of FRL’s merger deal to the tune of Rs24,500 crore with Reliance Retail Ltd after the US e-commerce giant dragged FRL to arbitration at the Singapore International Arbitration Centre in October 2020.

Amazon alleged on March 3, as many as 600 stores of FRL were taken away by Reliance.