[Breaking]: Future-Amazon-Reliance: Delhi High Court refuses to restrain Amazon from writing to statutory authorities

In a setback to Future Retail, the Delhi High Court today refused to restrain Amazon from interfering in the Kishore Biyani-owned company's deal with Reliance Retail by writing to statutory authorities [Future Retail v. Amazon]..The order was pronounced by a Single Judge Bench of Justice Mukta Gupta in the suit by Future Retail Limited after an Emergency Arbitrator of the Singapore International Arbitration Centre (SIAC) restrained Future Group from taking any steps in furtherance of the transaction with Reliance Retail..The Court held that statutory authorities were free to form their own opinion as per law..In a mixed bag of findings for Future Retail and Amazon, the Court, prima facie, found that the suit filed by Future Retail was maintainable, the Emergency Award was valid, and that Future Retail's resolution approving the transaction with Reliance was also valid..The Court also stated that prima facie, the conflation of the three agreements i.e. Future Retial Shareholding Agreement (SHA), Future Coupons Pvt Ltd (FCPL) SHA and FCPL Share Subscription Agreement granted disproportionate rights to Amazon, which required government approvals under FEMA FDI Rules..Stating that the balance of convenience lied both in favour of FRL and Amazon, the court noted, .".. prima facie the representation of Amazon based on the plea that the resolution dated 29th August 2020 of FRL is void and that on conflation of the FCPL SHA and FRL SHA, the 'control' that is sought to be asserted by Amazon on FRL is not permitted under the FEMA FDI Rules, without the governmental approvals, this Court finds that FRL has made out a prima facie case in its favour for grant of interim injunction..Amazon has also based its representation on the alleged breach of FCPL SHA and FRL SHA, as also the directions in the EA order.".The Court opined that it was "a matter of trial" to determine whether Amazon's case outweighed FRL's claim and for now, it was for the statutories authorities/regulators to come to their own right conclusion..It said, ."..both FRL and Amazon have already made their representations and counter representations to the statutory authorities/regulators and now it is for the Statutory Authorities/Regulators to take a decision thereon.. Consequently, the present application is disposed off, declining the grant of interim injunction as prayed for by FRL, however, the Statutory Authorities/Regulators are directed to take the decision on the applications/objections in accordance with the law.".Future Retail Ltd (FRL) had announced its deal with Mukesh Ambani-owned Reliance Retail Ventures Limited earlier this year. .Amazon owns a stake in Future Coupons Pvt Ltd, which is in turn a 9.82% shareholder in FRL. The retail giant invoked arbitration on the ground that the Mukesh Dhirubhai Ambani Group of companies featured in the negative list of 30 entities with which Future Group could not transact..Without challenging the Emergency Award before the High Court, FRL had prayed that Amazon be prevented from writing to statutory authorities such as the Securities and Exchange Board of India (SEBI) in an attempt to stall the deal..FRL asserted that the Emergency Award was of no consequence as it was not enforceable in the Indian regime..It was also contended that being an investor in Future Coupons Pvt Ltd and not FRL, Amazon had no say in a transaction between FRL and Reliance..Reliance supported FRL's case before the High Court, arguing that Amazon was playing mischief by stalling the deal that would save FRL from going under..It asserted that all necessary parties and entities had already given consent to the scheme of transfer of assets. .Amazon, on the other hand, argued that the "ship of arbitration has sailed" in the present case and thus, the present suit was not maintainable..The e-commerce giant stated that the Emergency Award was binding on all parties as it was duly recognised under Part I of the Arbitration Act..Amazon asserted that the FRL SHA and FCPL SHA were in the nature of "single integrated transaction" which would give Amazon control over FRL..Meanwhile, the Competition Commission of India (CCI) approved the acquisition of the retail, wholesale, logistics, and warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited last month. .Senior Advocates Harish Salve and Darius Khambata appeared for Future Retail. Senior Advocate Abhishek Manu Singhvi appeared for Reliance. Senior Advocates Gopal Subramanium, Rajiv Nayar, Amit Sibal and Gourab Banerji appeared for Amazon..Read the Order:.Read the detailed report on the arguments made the senior counsel in the case here:.Future-Reliance v Amazon before Delhi High Court: Fate of Emergency Award, Group Company Doctrine and rights of investor.Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.