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MUMBAI: A visibly irritated Supreme Court on 8 February came down on two heavyweight litigants--Amazon and Future Group--calling their protracted legal battle a ‘luxury litigation’.
This was not the first time the top court had made such observations. In an earlier instance, the litigants were asked if a room should be kept aside for the filings of the case. Other judges have also expressed displeasure over the voluminous documents filed by both parties and directed them to submit short synopsis of their arguments and case briefs of not more than 3-4 pages.
"I am sorry to say to all of you. What is the fun in filing 22-23 volumes of records? How many documents both sides have filed repeatedly and is it the purpose of just dragging on or otherwise to harass the judges," Chief Justice N V Ramana had said.
It has been a messy 18 months since the two retailers entered a legal dispute and the end or a resolution is nowhere in sight.
At the heart of the tussle is the proposed sale of Future's retail assets to Mukesh Ambani-led Reliance Industries Ltd for ₹24,713 crore. The deal was announced in August 2020.
However, Amazon.com NV Investment Holdings LLC had opposed the transaction, arguing that its investment of ₹1,400 crore in Future Coupons, which is one of promoters of Future Retail, allows it block the sale of assets to Amazon's competitors.
And thus started a protracted battle.
The Amazon-Future litigation has now found its way into quite a few courts. The dispute has spawned a number of cases languishing in the Supreme Court, Delhi high court, National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) and the Singapore International Arbitration Centre (SIAC).
We look at the various cases and the stages they are at:
Supreme Court
On 25 January, the Future Group moved the Supreme Court seeking to prevent its lenders from declaring the company a non-performing asset (NPA) for missing its payments. The SC has agreed to hear the matter.
The cash-strapped company has sought two weeks to settle with lenders and to come up with a plan that could potentially turn around the company. The matter will be heard later this month.
Last week, the apex court reserved its order on whether NCLT proceedings can be permitted for a proposed deal between Future Retail and Reliance Industries, and declined to pass interim orders to stop banks from declaring Future Retail’s accounts as NPAs. The top court said it will pass orders on whether Future Retail can be provided more time to reach a resolution with its 27 lenders, having a total exposure of ₹17,000 crore to the company.
On 1 February, in a relief to Future group, the Supreme Court set aside three Delhi high court orders including attachment of properties of the firm and its directors and the refusal to grant a stay on the final arbitral award which had restrained Future Retail from going ahead with its ₹24,731 crore deal with Reliance Retail and ordered fresh adjudication.
On 7 February, the SC rejected Amazon's request to file a seven-page written submission in a Future group case.
On 23 February, it agreed to hear Amazon’s petition to resume arbitration proceedings against Future Group in the Singapore International Arbitration Centre.
Delhi High Court
On 5 January, the Delhi high court stayed arbitration proceedings against Future Group initiated by Amazon in the Singapore tribunal for violating contracts. The arbitration proceedings were to be convened from 8-10 January.
Amazon challenged this order in Supreme Court seeking to resume the arbitration proceedings against Future Group.
Currently, there are petitions filed by both the parties which will be taken up by the court on 11 February.
NCLT
Future Group and Reliance Industries had approached the NCLT to get shareholders’ and lenders approval for the proposed deal worth ₹24,713 crores.
Both Future Group and Reliance shareholders have received approval from the tribunal.
In November 2021, Future Group sought to defer a shareholders and creditors meet. However, the tribunal has directed a stay on it.
NCLAT
Next week, NCLAT will hear Amazon’s plea seeking a stay on the Competition Commission of India’s (CCI) 17 December order. The CCI in its order had suspended the approval for Amazon's deal to acquire a 49% stake in Future Coupons Pvt Ltd (FCPL), a subsidiary of Future Retail. It had also slapped a penalty of ₹202 crore on the US e-commerce major.
The anti-trust watchdog’s order had said that Amazon tried to “suppress and misrepresent" the facts of the deal. Even if the deal has been kept in ‘abeyance’, CCI has granted Amazon the time to seek fresh approval for the deal.
The Arbitration
Following the announcement of the Future-RIL deal on 5 October 2020, Amazon Holdings NV, initiated arbitration proceedings against Future Coupons and other entities at the Singapore Arbitration International Tribunal under SIAC rules, seeking, an order restraining Future Group from going ahead with the transaction with entities of Reliance Industries.
The arbitrator passed an interim order in favour of Amazon directing Future Group entities to not proceed with the deal with Reliance.
In the case of Amazon.com NV Investment Holdings LLC versus Future Retail Ltd., the Supreme Court confirmed that an award made by an emergency arbitrator in an arbitration seated in India is enforceable in Indian courts.
The arbitration proceedings in the matter were to be convened from 8-10 January 2022. The top court is yet to give a go-ahead in the matter.
Meanwhile, Amazon had written to independent directors of Future Retail, saying that private equity firm Samara Capital, which is backed by the US e-commerce giant, "remains interested and committed" to invest ₹7,000 crore for buying all retail assets of the debt-ridden company and asked the retail firm to furnish existing due diligence reports.
Future Retail on 25 January formally rejected Amazon’s offer, saying its valuation of ₹7,000 crore is lower than that offered by Reliance Industries and that it also falls far short of what the Indian retailer needs to pay lenders.
Amazon has now offered to sweeten its bid to make it more acceptable to the lenders of the beleaguered retailer.
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