Supreme Court was told today by Future Retail that “Amazon wanted to destroy them, and they succeeded,” as their bitter and long-running legal battle is still on the go, with the next hearing scheduled for April 4.
As the out of the court settlements between Amazon Inc. and Future Retail Ltd. (FRL) to resolve the matter failed, along with Reliance Industries Limited (RIL) taking over hundreds of stores of the Kishore Biyani-led group last month on unpaid rents mounting up to ₹ 4,800 crore, the accusing-and-the retort continues.
Future Retail and RIL have been accused of “fraud” by the Amazon group which added that
“We are hanging by a thread. No one wants to do business with us now.”
During the court proceedings, the following observations, discussions took place between the court and both groups.
Landlords are not before us, how could we pass the injunction orders against FRL, asked the Supreme Court to Amazon who has sought injunction order to be passed against FRL to stop it from transferring its assets to Reliance Limited.
Senior Advocate Harish Salve informed the Court that out of 835 stores they have at present 374 stores only.
The Court noted that both Amazon and Future Retail Limited agreed to continue before the Arbitrator but the question CJI posed, If a Arbitration goes on and Amazon wins then what will remain in their favour?
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During the hearing, Senior Advocate Gopal Subramonium appearing for Amazon submitted we are interested in resuming the Arbitration. There should not be sudden handover of assets. In the application we are requesting that pending arbitration proceedings these assets remain.
– really to restrain Alienation of any assets by the FRL.
– The assets must remain with FRL and to be continued with FRL, till the matter decided by the Arbitrator.
– In their own annual returns they have said that they have enough money to pay rentals. They have paid 15 million dollars recently. It is a sham representation they have made before the lordship and before the HC that they have no money.
– The assets should remain with FRL pending adjudication. The assets should not be given to anyone.
Senior Advocate Ranjit Kumar- The tribunal had 25/10/2020, which had restrained the respondents and in continuation till today. It has not been set aside by anybody. Therefore, the respondents cannot tinker with the Tribunal Order.
Senior Advocate Aspi Chinoy – transfer of assets it’s a collusive and consensual act. I have never seen in history that a lessee has transferred all the shops to the lessor. This is something “replies believe it or not!”. 800 shops get surrendered at the same time to a landlord without any resistance and order.
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Senior Advocate Harish Salve- I have filed a reply to his application. We told the tribunal, we cannot go on with the cross examination of experts. My learned friend (Amazon) has been before every forum. He has started the same dispute. Trying to ask the Delhi High Court for asking this relief. He has to elect which court he wants to argue. The DelhiHC single judge is hearing it.
CJI- the first issue is that before the Arbitration Tribunal and both of you agree to go.
Second issue is about the Amazon’s Interim Application that relying upon earlier statements of yours (FRL), and the relief sought could be seen by you.
Salve- so the situation is with FRL, in my reply I have given. The moment the bank gives NPA notice, nothing would survive, if bank took over. we have 374 stores as of today and have no intention of giving it to anybody. This is not stratagem, as my learned friend (Amazon) has said. They have succeeded In finishing us, they have finished us today. BigBazaar is gone today. All my accounts are frozen today.
Senior Adv Rakesh Dwivedi appearing as intervenor for Banks- no interim order should be granted, which is prejudice to banks. I am not a party to this petition. It’s should be without prejudice to my rights.
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CJI- Yes Mr Salve complete your arguments.
Salve- in the third wave of COVID19, it had really hit hard to retail stores. In respect to the 835 stores, I received a termination notice.
Justice Hima Kohli- Are you in occupation of these 374 Stores. You said, you are hanging by threat.
Salve- they are in a hope, if Reliance scheme comes through, they will get paid.
Justice Hima- Mr Subramonium, the landlords are not before us, how can the court would pass an order of injunction. This is the question we would like you to answer.
Salve- they have not filed any rejoinder to our reply. It’s very easy to come to court and pass a statement. Please see where are we today. This all happens after March 2021. Our brand is called Big Bazaar store on a leave an licence basis. There are 374 stores which are with us as of today. Nobody is willing to give us credit today and we are stuck today. We have petty cash with that we are managing. We have no workers.
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CJI- if that is a case, what remains in your company?
Salve- We have garments business as well. Today Big Bazaar is a name.
CJI- If a Arbitration goes on and Amazon wins then what will remain in their favour.
Salve- it would be a money decree. Business is like this, sometimes you wins and lose.
If Reliance does not renew and Bank gives Section 7 notice the scheme goes.
They may have a claim of damages against Biyani’s, they may continue.
Once bankruptcy code proceedings come in way nothing in these proceedings would survive. Arbitration become infructuous and they may better claim a damages. This happens in business, this is the position today. My concerned today is, they (Reliance) have extended the scheme to three months, and if Reliance takes up the scheme then bank would take over.
Frankly these all reliefs what Amazon are seeking, are alien to this matter. I am not doing anything, this is my submission.
Rohatgi- I am appearing for Future Coupons. Only single question in these appeals is whether the Arbitration should go on. We have not done anything in breach of the orders. We are tenants and if we are unable to pay then the Landlord has right to take. Reliance is putting some oxygen and that would not remain for long. Let him deposit a 5000 crore as a rent in court. They (Amazon) are saying the today give a injunction order against Tenant not to transfer any assets which is of Landlord to anybody till the matter is pending.
Dwivedi- As I said, no order should be granted which prejudices our rights. Banks should be left free to take action as per law.
CJI- Mr Gopal Subramonium, How much time you will take?
Gopal- 45 minutes.
CJI- Can you answer any questions on Monday, raised by Senior Advocate Harish Salve.
Gopal- I would be very happy to do that.
CJI- Both sides can give a short note. On Monday we are listing. NDOH 4th April 2022.
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The Court was hearing the petition filed by Amazon, challenging the Delhi High Court order, which had stayed further proceedings before the Arbitral Tribunal in Amazon NV Investment Holdings LLC vs Future Coupons Private Limited, SIAC Arbitration of 2020.
On 15th March, the Supreme Court said it will pass orders in an application filed by Amazon seeking resumption of Arbitration Tribunal hearing and also an injunction on Future Retail from transferring its assets to Reliance Industries Limited.
Amazon’s Senior Counsel Gopal Subramonium apprised the three-judge bench led by the CJI NV Ramana that he had filed an application seeking interim protection against transfer of assets.
He had said,
“I have no problem if the tribunal takes up the Section 32 application first. but if the application is not entertained, then the final hearing should be completed. We need some interim protection.”