The Delhi High Court has today held that the regulators will take the decision on the Future Group and Reliance Deal in accordance with the law, whereas, Amazon can object on the deal and ask regulators to restrict.
A single judge bench of Justice Mukta Gupta held while pronouncing the judgment through video conferencing noted that the “Authorities/regulators are directed to take the decision on the applications/objections in accordance with the law”.
Future Retail had alleged that the company in the e-commerce sector was allegedly interfering in the deal worth Rs 24,713 crore based on an interim order by the International Tribunal of Singapore. Amazon said that it is a binding order. The FRL had appealed to the High Court to stop the American e-commerce company from writing letters to SEBI, CCI and other regulators regarding the SIAC order. It said it would interfere with its agreement with Reliance Industries.
The Senior Advocate Harish Salve appearing for the Future Group submitted that “I’m not seeking any anti-arbitration injunction or any anti-suit injunction but only an interim restraint on Amazon to not interfere before the authorities such as SEBI etc. in relation to the lawful ‘transaction’ between FRL (Future Retail Ltd.) and Amazon pending consideration before the Regulators and statutory authorities.”
However, on the basis of the arguments, considering the issue “Whether FRL is entitled to an interim injunction?”, the bench held that “the trinity of the principles for grant of interim injunction i.e. prima facie case, irreparable loss and balance of convenience are required to be tested in terms of principles as noted above. Since this Court has held that 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.”
The bench further noted that “However, the main tests in the present case are in respect of “balance of convenience” and “irreparable loss”. Even if a prima facie case is made out by FRL, the balance of convenience lies both in favour of FRL and Amazon. If the case of FRL is that the representation by Amazon to the statutory authorities /regulators is based on illegal premise, Amazon has also based its representation on the alleged breach of FCPL SHA and FRL SHA, as also the directions in the EA order. Hence it cannot be said that the balance of convenience lies in favour of FRL and not in favour of Amazon. It would be a matter of trial after parties have led their evidence or if decided by any other competent forum.”
Raising another reason for rejecting the interim injunction sought, the bench said that both FRL and Amazon have already made their representations to the authorities/regulators and it is now for them to decide over the issue.
Singapore’s International Arbitration Centre (SIAC), in an interim order, passed on October 25, prohibited FRL’s sale of its assets. Amazon then wrote to the Securities and Exchange Board of India (SEBI), the stock exchanges and the Competition Commission of India (CCI), seeking consideration of the Singapore arbitration’s interim order.
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