Delhi High Court clears deck for Future-Reliance deal
The division bench said Amazon was not a party to the deal between the Future Retail and the Reliance Industries and Amazon had no reason to seek status quo on the deal
The Delhi High Court has cleared the deck for the much-debated Future Retail Limited (FRL) proposed Rs 24,713 crore sale deal with the Mukesh Ambani-owned Reliance Industries Limited (RIL).
A division bench of Chief Justice D N Patel and Justice Jyoti Singh on 8 February 2021 paved the way for Kishore Biyani-owned FRL to handover its retail assets to RIL and stayed the 2 February 2021 order of the single judge. Justice J R Midha had ordered maintaining status quo while hearing the enforcement application filed by Amazon, barring FRL from taking steps to dispose of or encumber its issues or issue any securities to seek any funding against them.
The division bench was categorical in saying that Amazon was not a party to the deal between the FRL and RIL and that Amazon had no reason to seek to maintain the status quo on the deal. The Court also rejected a request of the Amazon counsel to keep the order in abeyance for a week so that it could explore alternative remedies.
FRL had requested the lifting of the status quo on the deal saying Amazon can be compensated for its losses if any, even after the deal goes through. Singapore's Emergency Arbitrator (EA) had earlier on 25 October 2020 restrained the Future Group from going ahead with its deal with RIL. Justice Midha had agreed with the EA saying it had rightly passed the order and the issue is enforceable in the same manner in India.
However, the division bench's order now has come as a big relief to Kishore Biyani's Future Group which had been in massive debt. It can now go ahead with the transaction formalities. While the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI) had already given their nods to the deal, the only requirement remaining is the approval by the National Company Law Tribunal (NCLAT).
The division bench clarified that it was not inclined to adjudicate the case at this stage as Justice Midha was yet to pronounce his order. The division bench made it clear that its 8 February order shall not come in the way in the pronouncement of the order of the single judge.
Hearings in the matter by the division bench would now commence from 26 February 2021.