Future Retail says reviewing HC order, Amazon welcomes verdict.
Kishore Biyani-led Future Retail Ltd (FRL) on Monday said it is “reviewing” the Delhi High Court order that has rejected its plea to restrain Amazon from writing to regulatory authorities about the SIAC arbitral order against its asset sale under a Rs 24,713 crore deal with Reliance. FRL, in a regulatory filing, said it would submit a brief summary after consultation with legal advisors.
"We are in process of reviewing the same and shall submit a brief summary after consultation with legal advisors,” it said while also submitting the 132-page order. An Amazon spokesperson welcomed the order.
In an emailed statement, the spokesperson said, "We welcome the verdict of the High Court of Delhi rejecting the interim injunction sought by Future Retail and their claim that the Emergency Arbitrator process is invalid under Indian law."
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In 2019, Amazon had agreed to purchase 49 per cent of one of Future's unlisted firms -- Future Coupons Ltd -- with the right to buy into flagship Future Retail Ltd after a period of three to ten years. Future Coupons holds 7.3 per cent equity in BSE-listed Future Retail Ltd, which operates popular supermarket and hypermarket chains such as Big Bazaar, through convertible warrants.
The e-commerce giant had dragged Future to arbitration at Singapore International Arbitration Centre (SIAC) after the indebted Kishore Biyani group firm signed a pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance in August this year.
Amazon's argument is that Future violated the contract by entering into the deal with rival Reliance.
In October, SIAC passed an interim award in favour of Amazon, with a single-judge bench of VK Rajah barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Amazon has also written to SEBI and stock exchanges, urging them to take into consideration the interim judgement while reviewing the proposed transaction.
FRL had moved the Delhi High Court on November 7, contending that Amazon is ''misusing'' the interim order and “interfering” with its deal with RIL.
On Monday, Justice Mukta Gupta said while FRL has made out a prima facie case of interim injunction, the relief cannot be granted as the balance of convenience lies in favour of both Future Retail and Amazon, and whether any irreparable loss would be caused to either side, has to be determined during trial of the suit or by a competent forum.
The high court said another reason why it did not grant an interim injunction was that both FRL and Amazon have already made their representations and counter representations to the statutory authorities or regulators and "now it is for the statutory authorities/regulators to take a decision thereon".
It further said that FRL's August 29 board resolution approving the deal was not invalid or void as claimed by Amazon and the e-commerce giant's representations to that effect to statutory authorities and regulators was "based on incorrect assertions" which meant that its action was based on "unlawful means".
Therefore, FRL has made out a prima facie case of "tortious interference", the high court said and added that "the act of Amazon would fall foul of the freedom of FRL and Reliance to enter into the transaction thereby causing loss to both FRL and Reliance which would be a civil wrong actionable by both FRL and Reliance in case they suffer any loss".
The term ''tortious interference'' means to intentionally damage someone's contractual or business relationships with a third party.
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