Companies

Delhi HC stays single judge’s status quo order on Future-Reliance deal

Our Bureau Mumbai | Updated on February 08, 2021

A Delhi High Court Division Bench today stayed the status quo order passed by a single judge in the case related to the dispute between Amazon and Future Retail.

Chief Justice DN Patel and Justice Jyoti Singh said the prima facie reason was that Future Retail was not a party to the August 22, 2019 Shareholders Agreement executed between Amazon, Future Coupons Private Limited and the promoters of Future Retail, under which arbitration was initiated by Amazon in Singapore. Also, the US e-commerce giant was not a party to the deal between FRL and Reliance Retail. The deals “are different” and “therefore, the group of companies doctrine cannot be invoked”, it said.

The Court also observed that statutory authorities cannot be restrained in private litigation from acting in accordance with the law. The ruling comes as a relief for Future Retail as its ₹25,000-crore deal with Reliance Retail was getting delayed by the status quo order of the single judge.

On February 2, the single judge Bench had directed Future Retail Limited (FRL) to maintain status quo on the transfer of its retail assets to Reliance Retail. Justice JR Midha has said he was of the prima facie view that an order of the Emergency Arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) restraining FRL from taking any steps to transfer its retail assets was enforceable in India.

This was based on a plea by Amazon seeking enforcement of the EA order restraining FRL from going ahead with its deal with Reliance Retail. FRL had filed an appeal with the Division Bench challenging this order.

FRL and Reliance had already got approvals from the Competition Commission and SEBI. The matter was moved to the NCLT for the demerger. Justice Midha had directed all statutory authorities to maintain status quo. The NCLT is to hear the FRL demerger case on March 01.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on February 08, 2021
This article is closed for comments.
Please Email the Editor