The interim award of the emergency arbitrator in Singapore has ruled that Future Group and Kishore Biyani have no good legal reasons for effecting the sale of Future Retails core assets behind Amazons back and gravely compromising its interests.
The ruling which came on October 25 notes that the respondents (Future Group) are the primary authors of this unhappy situation. "Granted, the Covid 19 situation had caused them unforeseeable difficulties and substantial losses and without fresh capital, FRL's future remains unstable. But even in these situations, the law expects businesspersons to honour their contractual commitments unless these have been legally vitiated or modified. Economic hardship alone is not a ground for disregarding legal obligations," it said.
"The respondents no good legal reasons for effecting the sale of Future Retail's core assets behind the claimant's back and gravely compromising its interests," the ruling said.
"The claimant has an apparent right to be present at any table considering the restructuring of FRL and the Future Group. This is because the core assets of FRL cannot be compromised without its consent. Notwithstanding the claimant's desire to work with them, the respondents decided to enter into enter into a transaction with a contractually prohibited entity to strip FRL of its core assets. This disregarded their obligations to the claimant," the ruling said. Future Group has sold most of its assets to Reliance Retail.
The ruling said that FRL's retail chains are unique and have peculiar strategic importance and value to the claimant. The grave and imminent threat to the destruction of rights conferred upon it by the respondents merits immediate interim relief, the ruling said.
The majority respondents have said that the "horse has bolted" and that consequently the claimant no longer has any legitimate interests meriting protection. "This is incorrect. The horse has not bolted even though the respondents have opened the stable door. Even assuming that the "horse has bolted", it is apparent that the respondents are contractually obliged to work with the claimant to cajole the "unruly horse" to return its stable", it said.
"In sum, the more delay in giving relief, the greater the prejudice to the claimant. It is apparent that at some point of time in the very near future, restoring the claimant's rights will become impossible," the arbitration ruling said.
"It is just, in the circumstances, to award interim relief to the claimant to restrain and injunct the respondents from taking any further steps in connection with the disputed transaction," the ruling said.