Companies

Delhi High Court stays RIL’s acquisition of Future Retail

Forum Gandhi Mumbai | Updated on February 02, 2021

Amazon has made a strong case against ₹25,000-cr deal, says judge

In a win for Amazon, the Delhi High Court on Tuesday granted an interim stay on the ₹25,000-crore deal between Future Retail Ltd (FRL) and Reliance Industries Ltd (RIL). A single-judge Bench has directed all the parties involved, along with the Central government and all statutory authorities, to maintain status quo till the reserve order is passed.

Justice JR Midha observed that prima facie, just like the Singapore International Arbitration Center’s (SIAC) Emergency Arbitrator (EA), he too found that Amazon made a strong case.

“This court is satisfied that immediate orders are necessary to protect the rights of the petitioner (Amazon) till the pronouncement of the reserved order. In that view of the matter, the respondents are directed to maintain status quo as on today at 04.50 pm till the pronouncement of the reserved order,” the interim order stated.

He further directed all the respondents to file an affidavit to place on record the actions taken by them after October 25, 2020, and the present status of all those actions, within 10 days.

On Monday, the judge had suggested that both Amazon and FRL be given the opportunity to reach an amicable solution. Amazon was represented by P&A Law Offices and AZB & Partners while FRL was represented by Naik and Naik.

Further to the judge’s suggestion on having conversations with Amazon, Senior Advocate Darius Khambata for FRL said: “We deeply reflected over it last evening. The bus has already left. As far as FRL is concerned, we are a public limited company, and we have to answer to our shareholders.”

Moving on

“We have no contract with Amazon,” added Khambata. “At this stage, when we have already moved into another stage and agreed to a scheme that is now in the NCLT (National Company Law Tribunal), it will create tremendous confusion and lead to nowhere. We are not in a position to have further talks with Amazon.”

On the other hand, Gopal Subramanium, representing Amazon, said: “Amazon is more than willing to enter into a purposive dialogue for the purpose of direct contact, which will be a substantial dialogue for resolving the present case and look at it as an opportunity for a well-structured solution.” But with Future declining to participate in any talks, the court gave the interim order placing the entire deal on hold.

According to sources, FRL is likely to appeal against the order. So far, SEBI and CCI have conditionally approved the FRL-RIL deal.

Published on February 02, 2021

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