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Future-Reliance deal: Supreme Court reserves judgment on Amazon plea against Delhi HC order

Amazon had moved the top court against the Delhi High Court’s division bench order which paved the way for the Reliance-FRL deal. Amazon’s plea stated, “The group had earlier unequivocally stated that they will continue to take steps to complete the impugned transaction.

The Supreme Court on Thursday reserved its judgment on the petition filed by Amazon against the Delhi High Court Division Bench order that had stayed the order of the single judge, directing a status quo on the Future-Reliance deal.

The bench of Justices R.F. Nariman and B.R. Gavai said, “So we close the case now. The judgement is reserved”

Amazon had moved the top court against the Delhi High Court’s division bench order which paved the way for the Reliance-FRL deal. Amazon’s plea stated, “The group had earlier unequivocally stated that they will continue to take steps to complete the impugned transaction. The greater the progress made towards the completion of the impugned transaction, the harder it will be to unravel it. Over time, the interests of additional third parties may also become entwined with the impugned transaction and be subsequently compromised. Further, irreparable harm will be caused to the petitioner.”

Senior Advocate Gopal Subramanium appearing for Amazon submitted, “the Biyanis of Future Group had negotiated with it to enter into certain agreements and are bound by Singapore’s Emergency Arbitrator award restraining FRL from going ahead with its merger deal with Reliance Retail. It reiterated that EA’s Award was enforceable.”

Whereas, Senior Advocate Harish Salve appearing for FRL submitted, “There was no provision for EA under the Indian Law” and “it cannot be done by the process of construction” while referring to the single judge order of the Delhi High Court which had held the award of the EA to be valid.

A division bench of the High Court presided by Chief Justice D.N. Patel and Justice Jyoti Singh while passing the order observed that since Future Retail Limited (FRL) is not a party to Arbitration Agreement, prima facie, group of companies doctrine can’t be invoked. The High Court further noted that in preliminary findings there was no reason to seek a status quo order from a single judge. “Statutory authorities like SEBI cannot be restrained from proceeding in accordance with law,” the bench said. The division bench had also stated that the observations made by it are only prima facie and the single judge shall not be influenced by it while passing its order.

The order was passed while the court was hearing an appeal filed by Future against an order of the single judge order directing it to maintain status quo on its Rs 24,713-crore deal with Reliance that had been earlier objected by Amazon. The appeal filed before the Supreme Court states that the High Court “failed to appreciate that orders made under the Act [Arbitration and Conciliation Act, 1996] are appealable only if there exists a provision under the Act specifically providing for a right to appeal”. 

Since the single bench order was passed under Section 17(2) of the act, and there being no provision for appeal under the said section, no appeal would lie against the order.”

The petitioner has further submitted that “the Hon’ble High Court, while issuing the Impugned Interim Common Order, conveniently ignored the fact that Section 13(1) of the Commercial Courts Act, 2015 merely provides the forum for filing appeals and does not confer an independent right of appeal. Further, it is the parameters of Section 37 of the Act alone which have to be looked at in order to determine whether the appeal is maintainable or not”.

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The petitioner has further argued that the High Court while passing the impugned interim 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.

Hence in the light of the above arguments, Amazon had sought a stay on the order of the Division bench. The appeal has been filed by Advocate Mohit Singh on behalf of Amazon.

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