NEW DELHI: The Supreme Court on Monday allowed National Company Law Tribunal (NCLT), Mumbai, to continue proceedings on Kishore Biyani-led Future Retail Ltd plea seeking permission for calling shareholders’ meeting to approve its Rs 24,713 crore retail asset sale deal with Reliance Retail but asked the tribunal not to pass final orders sanctioning the deal.
A big fight between Jeff Bezos’ global retail giant Amazon, eying to consolidate position in the huge Indian retail market, and the Biyani group, owner of the biggest retail chains in India through FRL, broke out when FRL decided to dump Amazon to go with Reliance Retail.
Amazon had cited its Rs 1,413 crore investment in Future group before Singapore International Arbitration Centre’s Emergency Arbitrator to get a stay on the FRL-Reliance Retail deal on October 25 last year. FRL had said that EA had no jurisdiction over its domestic deal with Reliance.
The fight spread to Delhi high court, where the single Judge bench had on February 2 restrained FRL from going ahead with the deal. But, the restraint order was vacated by a division bench of the HC on February 8 forcing Amazon to move the SC. Meanwhile, Future group had written to NCLT, Mumbai, for permission to call shareholders’ meeting to approve the mega deal with Reliance Retail. The deal has already been approved by most statutory authorities.
Amazon’s counsel Gopal Subramaniam did not have to do much persuasion to make the bench of Justices R F Nariman and B R Gavai entertain the appeal. But, said, “We have read the papers carefully. We know exactly what is happening. We are refraining from disclosing what we feel.” It issued notice and asked FRL to reply in three weeks.
When the bench was about to stay the proceedings before the NCLT, respondents represented by senior advocates Harish Salve and K V Vishwanathan told the bench that the NCLT’s proceedings were merely for calling of shareholders’ meeting. Salve said, “Reliance’s meetings are separate from the FRlL’s. Even if a meeting is called, it cannot take place be before six weeks. When nothing is happening, why should the court stay the NCLT proceedings?”
The bench agreed with Salve while issuing notice to FRL. It asked for a response affidavit in two weeks and a rejoinder from Amazon a week thereafter. While directing the listing of the appeal for hearing after three weeks, the bench said, “In the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of the scheme.”
In August 2019, Amazon had signed an agreement with Biyanis for buying 49% stake in Future Coupons and was allegedly told that it would have a right to purchase a stake in Future Retail, which runs popular mega marts like Big Bazar, after three to ten years. But, Future Coupons held only a little over 7% stake in FRL.
A year later in August 2020, FRL entered into a mega-deal with Reliance Retail Ventures Ltd and agreed to sell later its retail, wholesale, warehousing and logistics assets. This was viewed by Amazon as a major challenge to its dream of becoming the retail leader in India and it had moved SIAC for stay of the FRL-Reliance agreement.