HC directs Future Retail to maintain status quo on deal with Reliance

The Delhi High Court on Tuesday dealt a major blow to Future Group by directing it to maintain status quo till further orders regarding its Rs 24,713 crore deal with Reliance Retail to sell certain retail assets to the latter. Amazon has objected to the deal, seeking enforcement of an award by Singapore’s Emergency Arbitrator (EA) which has restrained Future Group from going ahead with the transaction.

The court said the EA’s order is enforceable in the same manner as that of an arbitrator’s order. It said that the EA had rightly proceeded against Future Retail (FRL) and its award was not a nullity.

The single-judge bench of Justice JR Midha, meanwhile, has reserved its final order in the matter.

The bench also asked FRL to place on record within 10 days all the steps and actions taken by it after the date of the emergency award, October 25, 2020, in connection with the deal with Reliance Retail.

Earlier in the day, FRL had turned down the HC’s suggestion to engage in talks with Amazon. “We have no privity of contract with Amazon. It will create tremendous confusion to have talks with Amazon. We do not concede to this suggestion,” senior counsel Darius Khambata, appearing on behalf of FRL, said.

Senior counsel Vikram Nankani for Future Coupons said, “We echo the statement made by Khambata. A lot of water has flown under the bridge. ED has also started investigation thanks to their stand.”

Amazon, on the other hand, told the court that it was out of deference to the Indian legal system that it was willing to enter purposive dialogue. The Singapore arbitration was an attempt to resolve dispute via talks, senior counsel Gopal Subramanium and Amit Mishra argued on behalf of Amazon.

On Monday, Justice Midha had asked Future Group and Amazon to find a solution and suggested that the matter can be referred to two retired Supreme Court judges. “Both of you tell by tomorrow (Tuesday) whether any endeavour can be made … In commercial matters, it is always helpful to find a solution,” the HC had told lawyers appearing for the two companies. “For a person you’ve taken money from, you can at least make an effort to resolve …”, the judge had told FRL.