Delhi High Court Orders Status Quo On Future Group-Reliance Retail Deal
A single-judge bench of Justice JR Midha of the Delhi High Court has directed a status quo on the Rs 27,513-crore deal between the Future Group and billionaire Mukesh Ambani-led Reliance Retail Ventures Ltd.
“This court is satisfied that immediate orders are needed to protect the rights of the petitioner (Amazon.com Inc.) till the pronouncement for the reserved order. In that view of the matter, the respondents (Future Group) are directed to maintain status quo as on today at 4:49 PM till the pronouncement of the reserved order,” the Delhi High Court said.
Amazon.com NV Investment Holdings LLC had approached court after the Securities and Exchange Board of India granted conditional approval to Future Group’s scheme of arrangement and sale of its assets to the retail arm of Reliance Industries Ltd. on Jan. 20.
In its petition dated Jan. 25, Amazon had argued that the Kishore Biyani-led Future Group ignored the directions of the Emergency Arbitrator and continuously pursued regulatory authorities requesting them to approve the transaction. Future Group, it has said, has maliciously and deliberately disobeyed the arbitrator’s order.
The company sought recognition and enforcement of the emergency arbitrator’s order under section 17(2) of the Arbitration and Conciliation Act, 1996. The provision allows a party to seek enforcement of an interim order passed by an arbitral tribunal in the same manner as it would for a court order.
The Future Group companies had countered the plea by arguing that an emergency arbitrator doesn’t qualify as an arbitral tribunal for the purposes of section 17(2) and called the order itself a nullity.
The high court, however, prima facie disagreed with the contention. It said that:
- The emergency arbitrator is an arbitrator and the order dated Oct. 25, 2020, (the emergency arbitrator’s order) isn’t a nullity.
- The order dated Oct. 25 is enforceable under section 17(2) of the Arbitration and Conciliation Act, 1996.
The court has also directed Future Group companies to file an affidavit giving details of the actions taken by them after Oct. 25 and the present status of all those actions. The reply has to be filed within 10 days.
The court has also directed all authorities “to maintain status-quo with respect to all matters in violation of the orders dated Oct. 25, 2020’’ within 10 days of receipt of the order.
Future Retail Ltd, one of the companies involved in the deal, informed the stock exchanges later in the day that it “will explore all legal remedies and take appropriate steps to pursue the scheme of arrangement”.