Future-Reliance Retail Deal: Status Quo Lifted By Delhi High Court
A two-judge bench of the Delhi High Court has lifted the status quo on the Rs 27,513-crore deal between the Future Group and billionaire Mukesh Ambani-led Reliance Retail Ventures Ltd.
The bench stayed the "operation, implementation and execution" of the single-judge Feb. 2 order till the next date of hearing. Chief Justice DN Patel and Justice Jyoti Singh, in their order, said:
That the appellant (Future Retail Ltd.) is not a party to the agreement between Amazon and Future Coupons Pvt.
In an agreement between Reliance Retail and Future Retail, Amazon is not a party.
Prima facie, the three agreements are different and, therefore, "groups of companies doctrine" can't be invoked.
Referring to the relevant agreement clause, the bench prima facie noted that Amazon has no intent to take control of Future Retail and thus there was no reason to seek a status quo order before the single judge.
On Feb. 2, while directing a status quo on the deal between Future Retail-Reliance Retail, Justice JR Midha had reserved his judgment on Amazon’s plea seeking enforcement of the emergency arbitrator’s October order.
“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 p.m. till the pronouncement of the reserved order,” the Delhi High Court had said last week.
Future Retail approached the division bench against this order. Arguing for Future Retail, Senior Advocate Harish Salve questioned the need for a status quo on the transaction and said valuable time will be lost if the order is not stayed.
The company argued that Amazon was trying to ensure that Reliance does not get the 1,500 stores of Future Retail and was not concerned about the impact it would have on the employees.
Amazon countered saying as in the past, it continues to stand ready to help the company. There was no reason which would justify the lifting of the status quo as Justice Midha had ordered it only till the time he pronounces the reasoned order, Senior Advocate Gopal Subramanium said while arguing for Amazon.
The case will now come up for hearing on Feb. 26.