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Future Retails v Amazon : Delhi High Court Stays Single Bench's Status Quo Order On Reliance Deal

Shreya Agarwal
8 Feb 2021 1:09 PM GMT
Future Retails v Amazon : Delhi High Court Stays Single Benchs Status Quo Order On Reliance Deal
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The Delhi High Court on Monday today stayed the implementation of its own order passed by the Single Judge bench of Justice Midha, which had directed status quo order on the Future - Reliance retail stake sale deal of nearly Rs. 25000 crore.Passed by the Division Bench of Chief Justice DN Patel and Justice Jyoti Singh, the order notes that Future Retail Ltd (FRL) was not a party to...

The Delhi High Court on Monday today stayed the implementation of its own order passed by the Single Judge bench of Justice Midha, which had directed status quo order on the Future - Reliance retail stake sale deal of nearly Rs. 25000 crore.

Passed by the Division Bench of Chief Justice DN Patel and Justice Jyoti Singh, the order notes that Future Retail Ltd (FRL) was not a party to the arbitration agreement with Amazon. It also said that the Group of Companies Doctrine could not be invoked in the present case.
Chief Justice DN Patel said that the case involved three agreements- the FRL-Future Coupons Pvt Ltd (FCPL) SHA, the FCPL SHA and the FCPL Share Subscription Agreement, all of which were distinct from each other.
Patel noted, "It is undisputed that in the agreement between FCPL and FRL, Amazon is not a party," and that it was prima facie clear that Amazon had "no intent" to procure FRL. Therefore, it said that "the statutory authorities should not be stopped from proceeding in accordance with law."
Sr. Adv. Subramanium raised two prayers on behalf of Amazon after the order, in one, he said Chief Justice Patel had mentioned that Amazon was not a "party", however, the term should have been "signatory". In his second prayer, he asked that the court be pleased to order a suspension of the order for a week, to grant Amazon time to avail of and exercise its legal remedies. Both the prayers were rejected.
In this long stretched volley between FRL and Amazon, FRL had approached the Division Bench against an interim protective order passed by Justice Midha on Feb 2 granting relief to Amazon in the form of status quo against the implementation of the Reliance-FRL stake sale deal.
The February 2 order granted interim relief to Amazon, directing all authorities and parties to maintain status quo on the deal until a detailed interim order on the case.
The bench of Justice Midha had also given a strong prima facie view in Amazon's favour that as opposed to FRL's plea that the Award was a nullity, the Emergency Award is infact enforceable under Section 17 (2) of the Arbitration and Conciliation Act, and therefore directed FRL to bring on record all steps and actions taken by it towards the deal, after the award of the Emergency Arbitrator was passed on the arbitration on Oct 25, 2020. Further, the Court also stated that statutory authorities like SEBI, CCI could not be restrained from "proceeding in accordance with law".


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