Future Retail Ltd (FRL) on Sunday urged the BSE and the NSE to not give any credence to the arbitrator’s interim stay order on its ₹25,000-crore deal with Reliance Retail. In a communication to the stock exchanges, the Kishore Biyani-backed firm said the bourses should not take cognisance of Amazon’s letter alleging that public shareholders of FRL are being misled.
“FRL is advised that an Emergency Arbitrator (EA) has no legal status under Part I of the Indian Arbitration and Conciliation Act, 1996 and, therefore, the proceedings before an ‘Emergency Arbitrator’ are void and coram non judice . The EA order having been passed by an authority without jurisdiction is a nullity under the Indian law,” it said.
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“Any attempt on the part of Amazon to enforce the EA order shall be resisted by FRL to the fullest extent available under Indian law. FRL is also in the process of taking appropriate legal action to protect its rights,” it added.
Amazon’s claim that the stipulations under the deal struck with Future Coupon in 2019 extend to Future Retail, too, is misconceived, said FRL. “If the two separate agreements were treated as a single integrated transaction by which Amazon obtained an interest in and rights against FRL, then, in 2019, when the agreements were executed, there would have been a change in control of FRL in favour of Amazon, requiring it to make an open offer to FRL’s public shareholders. No such open offer was made, thereby suggesting that there was no intent of Amazon to consider the two agreements as a single integrated transaction at that point of time,” Future said.
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It added that a deal with Reliance is its only option in Covid times, and any delay in its implementation will cause irreparable losses to all stakeholders.
FRL has said that it hasn’t violated any agreements. “At best, Amazon’s claims are a contractual dispute between Amazon and the promoters of FRL, and Amazon has already initiated arbitration for the same.”
FRL has claimed that it has raised this issue in front of the EA. However, the arbitration order has overlooked this illegality by stating that Amazon has not attempted to assert control over FRL. “Given that the EA order is premised on violation of SEBI Regulations it cannot and ought not to be accorded any sanctity by SEBI, NSE and BSE,” it said