[Future-Reliance deal] Proceedings before NCLT not to culminate in sanction of scheme: Supreme Court notice on plea by Amazon

The Supreme Court on Monday sought response from Future Retail Limited in plea by Amazon Investment Holdings challenging the Delhi High Court order which had stayed the implementation of status quo direction passed by single-judge of the High Court with respect to the Future- Reliance deal..A Bench headed by Justice Rohinton Nariman also ordered that while the proceedings before National Company Law Tribunal (NCLT) can go on, it should not culminate in any final order of sanction of the scheme. ."Issue notice. Dasti in addition. To come up after three weeks. Rejoinder to be filed two weeks thereafter. List thereafter. Meanwhile, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme," the Court ordered..The Court also made it clear that the Division Bench of Delhi High will not proceed with the matter further after a Senior Counsel brought the same to the Court's attention. "Obviously, show them this order. We don't need to say that (specifically)," the Bench said. .Amazon had moved the Supreme Court challenging the Delhi High Court order which had stayed the implementation of status quo direction passed by single-judge of the High Court with respect to the Future- Reliance deal..The order under challenge was passed by a Division Bench of the High Court in an appeal preferred by Future Retail (FRL) against the status quo order passed by a single-judge Bench of Justice JR Midha. .The single-judge passed the status quo order in Amazon's plea seeking enforcement of the Emergency Award passed under Section 17(2) of the Arbitration & Conciliation Act..Amazon has contended that the Division Bench order is illegal, and arbitrary apart from being without jurisdiction..Illegal, arbitrary and without jurisdiction: Amazon moves Supreme Court against Delhi High Court stay on Future- Reliance deal status quo.In its Special Leave Petition before the Supreme Court, Amazon has asserted that the Division Bench of the High Court could not have heard a letters patent appeal from an order passed under Section 17(2) of the Arbitration Act."..the Hon’ble High Court failed to appreciate the fact that FRL could not have preferred the Appeal under Order XLIII Rule 1(r) of the CPC read with Section 13(1) of the Commercial Courts Act, 2015, thereby challenging an order issued under Section 17(2) of the Act.".It has also been contended that the Division Bench hastily passed the impugned order without waiting for the detailed order of the single-judge and without appreciating the “Group of Companies” doctrine."It is submitted that the Hon’ble High Court, while issuing the Impugned Interim Common Order, failed to appreciate that the Single Judge Order was issued by the Single Judge of the Hon’ble High Court for the limited purpose of preserving the rights of the parties till the pronouncement of the final orders and after coming to the conclusion that the Respondents have violated the directions contained in the EA Order including on the basis of the Respondents’ own unequivocal submission that would not maintain status quo," the plea states..Amazon vs Future: Delhi High Court prima facie finds Emergency Award enforceable, orders status quo on FRL-Reliance deal [READ ORDER].Amazon has further argued that FRL has acted in complete disregard of the rule of law and procedure prescribed by law and that a collateral challenge to an Emergency Award cannot be permitted..While reserving its order in Amazon's interim plea to stop Kishore Biyani's Future Group companies and officials from relying on approvals given by statutory authorities in relation to the deal, the single-judge had directed Future Retail Ltd to maintain status quo in relation to its deal with Reliance.This order was stayed by the Division Bench..The Division Bench had opined that FRL was not a party to an arbitration agreement with Amazon and prima facie the "Group of Companies" doctrine could not be invoked.Further observing that there was no reason to seek a status quo order from the single-judge, the Division Bench stated that statutory authorities like SEBI, CCI should not be restrained from "proceeding in accordance with law"..When the matter was taken up by the apex court for hearing on Monday, Justice Nariman said that the order under challenge "seems to have decided the appeal finally at the interim stage.""So what we are proposing to do is to issue notice and stay the NCLT proceedings," said Justice Nariman. .Senior Advocate Harish Salve, representing Future, told the Bench that the High Court has kept the appeal for further hearing on Friday this week. "The NCLT (proceedings) is only for calling meetings. The question of NCLT considering this application is much later and Amazon has interfered there. Staying proceedings at NCLT may unnecessarily delay without any corresponding benefits," said Salve. .The Bench, however, said that it will not delay things at all."The subject matter is whether the amalgamation goes through or not. At the interim stage, you cannot turn around and vacate an order without any reasons having been given," Justice Nariman said. .Adjourning NCLT proceedings will only delay the FRL meeting which will be pushed by another 6 weeks, Salve maintained. .The Court then said that it will pass an order that proceedings before NCLT can go on without any final order being passed on amalgamation. .The Court also clarified that separate proceedings before a Division Bench arising from the observations made by another single-judge of Justice Mukta Gupta in the case filed by Future against Amazon will continue. .Justice Gupta had, in December 2020, refused to restrain Amazon from interfering in the Kishore Biyani-owned company's deal with Reliance Retail by writing to statutory authorities..However, in a mixed bag of findings for Future Retail and Amazon, the single-judge had, 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..This order is also under challenge by Amazon before a Division bench and is slated to be heard today. The Supreme Court, however, made it clear that the said matter is not before it and the top court will not interfere with the same. .Amazon was represented by Senior Advocate Gopal Subramanium briefed by P&A Law Offices and AZB & Partners.