Future Group challenges court order blocking its Reliance deal in dispute with Amazon

Mumbai: Future Retail Ltd (FRL) challenged a Delhi High Court ruling that had ordered the company to halt the sale of its retail assets to Reliance Retail Ventures Ltd (RRVL), a unit of Reliance Industries. The ruling issued by a single judge was challenged in the same court before a two-judge bench. FRL, which runs Big Bazaar, EasyDay and Central, said if the deal to sell its retail and logistics assets to Reliance doesn’t take place, the company will be forced to go into liquidation.

The single judge had said Tuesday that the emergency ruling of the Singapore International Arbitration Centre (SIAC) to halt the deal—until it decides on Amazon’s challenge against the plan—was enforceable in India. The deal has already got approval from the Securities and Exchange Board of India (Sebi) and the Competition Commission of India CCI). It requires clearance from the National Company Law Tribunal (NCLT) in addition to no-objection certificates from creditors and minority shareholders.

“Admit the instant appeal and set aside the impugned order dated February 2, 2021, passed by the learned single judge. The scheme, which will be listed this week before the NCLT, cannot go through due to the impugned order,” FRL said in the appeal filed Wednesday that ET has seen.


FRL Cites Potential Risks
“The solvency of over 6,000 SMEs and their employees is at stake. Approximately ₹30,000 crore of public money in the form of bank loans and debentures issued by FRL and its group companies is also at risk.

The division bench headed by Chief Justice DN Patel and justice Jyoti Singh has listed the matter for today. The single bench had also ordered government counsel to inform all statutory bodies to take note of the interim ruling and said they should be asked to desist from granting any further regulatory clearances to the deal.

Legal experts said an order cannot be passed against those who are not a party to proceedings. “The statutory authorities are not a party in the suit filed by Amazon. The effect of the order affects many statutory authorities exercising their powers and… a status quo order has been given by the Delhi High Court without giving them an opportunity to be heard,” said Ashish K Singh, managing partner of law firm Capstone Legal. “Filing of a status report by statutory authority such as Sebi and CCI in a proceeding between two private parties, namely Amazon and Future Group, is quite rare and amenable to challenge in appeal.”