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Future-Reliance deal: SC stays proceedings in Delhi HC; asks NCLT, CCI, SEBI not to pass final orders

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New Delhi, Sep 9 (PTI) The Supreme Court Thursday stayed for four weeks all proceedings before the Delhi supreme court associated with the implementation of Singapore International Arbitration Centre’s (SIAC) EA award which restrained Future Retail Ltd from going ahead with its Rs 24,731 crore merger affect Reliance Retail.

US-based e-commerce giant Amazon, which has challenged the merger, consented to the interim order of the highest court on the appeals of FRL and Future Coupons Private Ltd (FCPL).

Statutory authorities like the National Company Law Tribunal (NCLT), Competition Commission of India (CCI), and Securities and Exchange Board of India (Sebi) have also been directed by the highest court to not pass any final order associated with the merger deal for next four weeks.

Before passing the consent order, a bench comprising judge N V Ramana and Justices Surya Kant and Aniruddha Bose said it’s taken note of the longer-term Group’s moving the SIAC seeking vacation of its Emergency Arbitrator”s (EA) interim award, which went in favor of Amazon, and therefore the verdict there has been reserved.

“Taking into consideration the submissions advanced by the learned senior counsel for the parties and particularly the very fact that the parties have approached the SIAC for vacating the Emergency Award gone by the EA and therefore the arguments within the said matter are concluded and the order goes to be pronounced shortly, we expect it fit to balance the interest of both the parties by staying all further proceedings before the Delhi supreme court for the nonce ..,” the highest court said in its order.

“We further direct to all or any the authorities i.e. NCLT, CCI, and Sebi to not pass any final order for a period of 4 weeks from today. This order has been passed with the consent of both parties. List these matters after four weeks,” it added.

The bench was critical that the supreme court, without hearing all the parties concerned, imposed cost or attachment of properties in its earlier order.

“The issue is, we must be fair. during a matter of this magnitude, if the hearing takes place without giving an opportunity to parties, how can one pass orders attaching property, pay a cost, etc. what’s this,” the bench said in its oral observations during the hearing.

The bench considered the submissions of senior advocates Harish Salve and Mukul Rohatgi, appearing for FRL and FCPL respectively, that the arbitrator at SIAC has reserved the ultimate verdict within the case after hearing each side and agreed to the proposed order of the bench that the proceedings before the supreme court often stay within the meanwhile.

Senior advocate Gopal Subramanium, appearing for Amazon, said the e-commerce firm wasn’t curious about any punitive action against FRL, FCPL, and their Directors and consented to pass of the order staying the supreme court proceedings.

“Do I even have any joy in sending anybody to jail? we’ve no desire to send anybody to jail to suffer punitive action… But nobody can say that it’ll still remain in breach of an enforceable order,” Subramanium said.

The senior counsel for FRL and FCPL mentioned the August 17 and other orders of the supreme court, which is seized of the plea of Amazon seeking enforcement of EA’s award in its favor.

The orders directed the attachment of assets of Future group companies and its promoters Kishore Biyani et al. for breach of the EA, Rohatgi said, adding that a show-cause notice for the civil arrest of Biyani and other directors of Future Group has also been issued.

Salve, appearing for FRL, said the high court’s single-judge order went beyond the scope of EA’s award and had the effect of prejudging the problems which are pending final adjudication before the SIAC.

“I have an arbitration pending. I even have taken a defense that I even have not breached any agreement. the only judge says admittedly the Respondents have breached the agreement,” he said.

Rohatgi said the single-judge order was procedurally flawed because the attachment order was passed without affording any opportunity of hearing to FCPL and its directors.

Both sides apprised the bench about the chronology of events within the high-profile case.

The FRL and FCPL have moved the highest court against the Delhi supreme court order of August 17 which said that it might implement the sooner order by its single-judge restraining FRL from going ahead with the deal in pursuance of the EA’s award.

The supreme court had also ordered attachment of properties saying that within the absence of any stay from the apex court, it’s no option but to enforce the order gone by its single judge on March 18.

Amazon dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC) in October last year, arguing that FRL had violated their contract by getting into the affect rival Reliance.

Kishore Biyani and 15 others including FRL and FCPL are embroiled during a series of litigations with Amazon, an investor in FCPL, over the affect of Reliance.

On March 18, besides restraining FRL from going ahead with its affect Reliance Retail, Justice J R Midha of the supreme court had imposed costs of Rs 20 lakh on the longer-term Group et al. related to it and ordered attachment of their properties.

The supreme court had asked the parties to file an affidavit detailing their assets within one month and show cause on why they ought to not be detained under civil prison for 3 months for violating the Singapore EA”s order.

It had also asked the longer-term Group to put on record the small print of action taken by it in reference to the Reliance deal after the EA order.

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