The Delhi High Court has passed an interim order stopping Future Retail Ltd (FRL) from selling its retail assets to Reliance Industries. The court in its order said that immediate orders are necessary to protect the rights of the petitioner (Amazon) till the pronouncement of the reserved order.
“All the concerned authorities are directed to maintain status quo with respect to all matters in violation of the order dated 25th October, 2020 …” the court order stated. In the petition, Amazon has claimed that the deal of Future Group with Reliance Industries violates the contract (between Amazon and Future Group).
Meanwhile, FRL in its statement said, “The Learned Single Judge, Justice Midha, of Hon’ble Delhi High Court today, in a petition filed by Amazon for enforcement of the interim award of the Emergency Arbitrator, has ordered status quo with respect to the scheme of arrangement. The Company is legally advised that the basis of the interim award of the Emergency Arbitrator has been superseded by the judgement dated December 21, 2020 passed by the Learned Single Judge, Justice Mukta Gupta of Hon’ble Delhi High Court. The Company will explore all legal remedies and take appropriate steps to pursue the scheme of arrangement.”
If the Future Group-Reliance deal falls apart, Future Group may end in financial trouble. Meanwhile, Future Group-Reliance deal has received approval from CCI and no objection from SEBI. But now hit a roadblock with the court order.
Amazon further alleged that it invested Rs 1,431 crore ‘on the clear understanding’ with the Future Group that it would be the sole vehicle for its retail business and its retail assets would not be alienated without Amazon’s consent.
Last year in October, Singapore International Arbitration Centre (SIAC) passed an interim order in favour of Amazon. The order stopped the deal between Reliance and Future Group.