The Delhi high court on Tuesday has directed Future Retail Limited (FRL) not to proceed with its merger with Reliance Retail as it reserved its verdict on US online giant Amazon’s plea against the merger.
While ordering status quo on the Rs 24,713-crore deal between Future and Reliance, the court upheld the judgment of the Singapore Emergency Arbitrator (EA) which in October had ruled in favour of Amazon that triggered a bitter feud between Future and Amazon leading to an earlier verdict by the Delhi high court followed by conditional approval of the Future-Reliance deal by Sebi, the BSE and NSE as well by the Competition Commission of India.

The court on Tuesday directed Future Retail Ltd (FRL) to maintain status quo in relation to its deal with Reliance Retail. Justice J.R. Midha said the court was satisfied that an immediate interim order was required to be passed to protect the rights of Amazon.

“Respondents (FRL) and other respondents are directed to maintain status quo as on today at 4:49pm till pronouncement of the reserved order,” the judge said.

Amazon has approached the high court seeking direction to order enforcement of the award by Singapore’s Emergency Arbitrator (EA) restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.

The high court, which heard the matter for four consecutive days, reserved its order on the main petition and also directed all other concerned authorities to maintain status quo in relation to the matters which are in violation of the emergency award and to file status report with regard to the present status within 10 days.

While pronouncing the interim order, the high court said it was of the prima facie view that the emergency arbitrator is an arbitrator and he has rightly proceeded against FRL and its order was not in nullity.

The court said it was clear that the October 25, 2020 order of the emergency arbitrator passing the award was enforceable and appealable under the relevant provisions of the Arbitration and Conciliation Act.
The high court directed FRL to file an affidavit stating the steps and actions taken by it from October 25, 2020, when the emergency award was passed, till now in connection with the deal with Reliance.

The high court had earlier issued notices and sought responses of FRL, Future Coupons Pvt Ltd (FCPL), Biyanis and other related parties on the petition by Amazon.

Amazon.com NV Investment Holdings LLC, in its plea, also sought detention of the Biyanis, directors of FCPL and FRL and other related parties in civil prison and attaching of their properties for alleged “wilful disobedience” of the emergency arbitrator's order.

It also sought to restrain Future Group from taking any steps to transfer or dispose of FRL's retail assets or the shares held in FRL by the Biyanis in any manner without prior written consent of Amazon.

The Future Group and Amazon have been locked in a battle after the US-based company took FRL into the emergency arbitration over alleged breach of a contract between them.