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Delhi high court restrains Future, Reliance from going ahead on deal
19 Mar '21
3 min read
Pic: Future Group
The Delhi high court recently upheld the Singapore Emergency Arbitrator’s (EA) order restraining Future Retail Ltd (FRL) from executing the ₹24,713-crore deal with Reliance Retail to sell its business, which has been opposed by US e-commerce firm Amazon. Justice J R Midha held that the Kishore Biyani-led FRL ‘wilfully violated’ the EA order and said it must face the consequences.
Slapping a cost of ₹20 lakh and ordering the debt-laden group against taking further action on the deal, the court also demanded an explanation why Biyani and others must not be sent to three months imprisonment since FRL’s intention is not honest while directing the presence of Biyani and others before it on April 28 and attachment of properties.
The Future Group and others associated with it have been directed to deposit the ₹20 lakh cost imposed on them in the Prime Minister’s Relief Fund within two weeks for providing COVID-19 vaccines to senior citizens in the below poverty line category.
“The respondents have taken Rs 1,431 crore from the petitioner solely on the basis of the rights provided by FRL to FCPL [Future Coupons Pvt Ltd] that they would not transfer their retail assets without the prior consent of the petitioner and never to a Restrict Person,” the court observed.
The court order came on Amazon's plea seeking direction to order enforcement of the award by Singapore's EA on October 25 last year restraining FRL from going ahead with its ₹24,713 crore deal with Reliance Retail.
The Future Group and Amazon have been locked in a battle after the e-commerce giant took FRL into the emergency arbitration over alleged breach of an earlier contract between them.
The court held that the EA is an arbitrator for all intents and purposes and had rightly invoked the Group of Company' doctrine in relation to the Future Group companies. It said the respondents have raised a vague plea of nullity without substantiating the same, a news agency reported.
It directed the Future Group to approach authorities for recalling the approvals granted for the FRL-Reliance deal and asked them not to violate the EA order.
The high court also asked the Future Group to place on record the details of action taken by it in connection with the Reliance deal after the EA order.
Justice Midha had earlier, in an interim order, directed FRL to maintain status quo in relation to its deal with Reliance. However, the interim order was stayed by the division bench of the high court.
Challenging the division bench's order, Amazon had approached the Supreme Court where the plea is pending.
Slapping a cost of ₹20 lakh and ordering the debt-laden group against taking further action on the deal, the court also demanded an explanation why Biyani and others must not be sent to three months imprisonment since FRL’s intention is not honest while directing the presence of Biyani and others before it on April 28 and attachment of properties.
The Future Group and others associated with it have been directed to deposit the ₹20 lakh cost imposed on them in the Prime Minister’s Relief Fund within two weeks for providing COVID-19 vaccines to senior citizens in the below poverty line category.
“The respondents have taken Rs 1,431 crore from the petitioner solely on the basis of the rights provided by FRL to FCPL [Future Coupons Pvt Ltd] that they would not transfer their retail assets without the prior consent of the petitioner and never to a Restrict Person,” the court observed.
The court order came on Amazon's plea seeking direction to order enforcement of the award by Singapore's EA on October 25 last year restraining FRL from going ahead with its ₹24,713 crore deal with Reliance Retail.
The Future Group and Amazon have been locked in a battle after the e-commerce giant took FRL into the emergency arbitration over alleged breach of an earlier contract between them.
The court held that the EA is an arbitrator for all intents and purposes and had rightly invoked the Group of Company' doctrine in relation to the Future Group companies. It said the respondents have raised a vague plea of nullity without substantiating the same, a news agency reported.
It directed the Future Group to approach authorities for recalling the approvals granted for the FRL-Reliance deal and asked them not to violate the EA order.
The high court also asked the Future Group to place on record the details of action taken by it in connection with the Reliance deal after the EA order.
Justice Midha had earlier, in an interim order, directed FRL to maintain status quo in relation to its deal with Reliance. However, the interim order was stayed by the division bench of the high court.
Challenging the division bench's order, Amazon had approached the Supreme Court where the plea is pending.
Fibre2Fashion News Desk (DS)
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