Reliance deal important: Future Group tells the Supreme Court
The Company would sink with 30,000 employees if the pact did not come through
The Future Group has submitted before the Supreme Court that being in a financially precarious situation, Future Retail Limited (FRL) would "sink with 30,000 employees losing their jobs" if the Rs.26,000 crores deal with Reliance Industries did not come through.
In the Amazon-Future case, both FRL and Future Coupons Private Limited (FCPL) argued that FRL should be allowed to go forward with the interlocutory proceedings of the scheme with Reliance. It would ensure finalizing the deal once the dispute with Amazon was concluded.
FRL pleaded, "We first sank because of the lockdown when people would not go to the shops. We are in this financially precarious situation. Fortunately, the banks are willing to wait. If the transaction goes through with the Reliance deal, we will pay off the banks. The deal is worth Rs.26,000 crores and Amazon's stake is Rs.14000 crores. Around 30,000 jobs will be saved. If you put this all together, let us get to that final stage. Amazon's interests are not hurt."
Appearing for the Future Group, senior advocate Harish Salve highlighted that under the Reliance deal, the employees were protected. "The September 2021 order protects both sides which say no final orders are to be passed. The interlocutory proceedings would be completed by then," he submitted.
Senior advocate Mukul Rohatgi, appearing for FCPL, submitted that the balance of equities favored Future Group and Amazon's interests were not harmed. "As regards the individual promoters of Future Group, the Biyanis, their entire assets were hypothecated. If we do not get through with the deal, everybody will sink," he stated.
Salve argued that Amazon wanted to paralyze everything. They were not interested in FRL, but were targeting the Reliance Group, its main competitor.
A bench comprising Chief Justice of India N V Ramana, Justice A S Bopanna and Justice Hima Kohli reserved its orders in the two pleas. First, the March 2021 order of the single-judge of the High Court that directed the attachment of assets of Future Group companies and its promoters for breach of Emergency Award. Second, the October 2021 order of the Singapore Arbitrational Tribunal's refusing to vacate the Emergency Award (EA) restraining it to continue with the Reliance deal.
The bench indicated that without going into the larger aspects, it might ask the Delhi High Court to decide the Future Group's appeal against the Singapore Tribunal's order. The bench also said that the High Court order could also be set aside as subsequent developments had taken place with the Singapore Tribunal affirming the EA.
Salve submitted that the EA had come after the Delhi High Court stated there was no arbitration agreement. Therefore, it had to be decided which of those orders would operate. He pointed out that the December 2020 single-judge High Court order had held prima facie that FRL had no arbitration agreement with Amazon.
Referring to the recent order of the Competition Commission of India (CCI), which revoked the sanction for Amazon's deal with Future Group, FRL argued that Amazon could not seek to enforce its contractual rights against Future Group until it got the CCI's sanction.
According to FRL, the manner in which the High Court judge proceeded to pass the enforcement orders, it failed to satisfy the requirements of the Principles of Natural Justice. It further said that the single-judge had denied FRL the opportunity to file pleadings and rejected its contention that the award of the EA was a nullity.
It added that the High Court had issued an express direction to the concerned statutory authorities Securities and Exchange Board of India (SEBI) and CCI to consider Amazon's objections and pass appropriate orders on the applications filed by FRL for the approval of Reliance's transactions. The approvals, thereafter, granted by the concerned authorities, were not open to the single-judge to directly recall these validly obtained permissions.
The FRL further cited the December 2021 CCI's order, which suspended Amazon's deal to acquire 49 percent of stake in FCPL on the ground that Amazon had failed to disclose complete details.
Advocate Rohatgi submitted that both FCPL and FRL were on the receiving end of the High Court judge's order. He added that the injunction by the arbitrator was against both the companies and the promoters, the Biyanis.
He informed that the judge granted no time to respond and passed a 200-page order without any reply being filed and everyone was held guilty of contempt. He held that the judge had mixed up FCPL and FRL and it was examined like both the companies were the same.
He added that the agreement between Amazon and FCPL was enforceable in India only on the approval granted by the CCI. The agreement was granted but was revoked recently. It held that Amazon's conduct was fraudulent. Further, Rs.200 crores fine was imposed on Amazon.
He questioned the hurry of hearing the matter daily, with no opportunity of filing the reply. "It has caused great prejudice to us. We are business people, the way we are injuncted and held guilty, has affected our business prospects," he said.