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Amazon-Future deal: Delhi HC stays single bench order upholding emergency award

Earlier on March 18, the Delhi High Court upheld the Emergency Award passed against the Rs. 34 billion Future-Reliance deal.

The Delhi High Court on Monday stayed a single bench order by which the court had upheld the order of the Emergency Arbitrator and rejected the contentions of the Future Group.

A division bench of the high court presided by Chief Justice D.N. Patel and Justice Jasmeet Singh while staying the order, which had also imposed a cost of Rs. 20 lakh on Biyani and other respondents, also issued notice to US based e-commerce giant Amazon.

The bench has now slated the matter for further hearing on April 30.

During the course of arguments, senior advocate Harish Salve appearing for Future Group read the directions passed by the Single Bench said, “I am seeking a stay on all these directions.”The matter is also pending before the Supreme Court. We either argue here or there (SC),” he added.

Gopal Subramanium appearing for Amazon argued that there is an Interim order in the SLP before SC. “We can’t surely argue at both the places. SLP was challenging the ad interim order,” Subramanium said while adding that it would be appropriate that an application is filed before the SC and directions are sought thereof.

Salve opposed the said submissions and said, “The appeal of the single bench order lies before this very court. My remedy lies in the appeal. Further directions have been passed by the Single Bench which have to be stayed.

“I don’t want the Supreme Court to be told that despite the matter being pending, this Court went into it,” he argued further. To this the court said, “Subramanium, they (Future) is saying that the single judge order be stayed during the pendency of the appeal.”

Following these arguments, the bench ordered, “Having heard the counsels and looking at the facts and circumstances of the case…the single bench order is stayed. The stay will remain in operation till the next date of the hearing. Notice issued on the appeal and the same is made returnable on April 30.”

Future Group on April 20 moved the Division Bench of the Delhi High Court against the order passed by a single-member Bench, which directed to stay its Rs. 24,713 crore deal with Reliance Industries to sell the firm’s retail and wholesale business.

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The Kishore Biyani-led group firm, Future Retail Ltd (FRL), filed an appeal before the higher Bench of the same High Court against the orders passed by a single-member Bench of Justice J.R. Midha, Future Retail said in a regulatory filing.

Earlier on March 18, the Delhi High Court upheld the Emergency Award passed against the Rs 34 billion Future-Reliance deal.

The order, passed by a single-judge Bench of Justice J.R. Midha, will restrain Future Retail from going ahead with the deal.

The court also imposed a penalty of Rs 20 lakh on Future and the money will go to the Prime Minister’s Relief Fund.

Justice J.R. Midha said,

“Showcause notice to Respondent no 2-13 (Kishore Biyani, Future Retail, Future Coupons and others), explaining as to why they should not be detained in civil prison for violating the order of the emergency arbitrator for three months.”

The single bench order was passed on the petition filed by Amazon, seeking the enforcement of the Emergency Award and restraining the Future Group from going ahead with its deal with Reliance, stating the order passed by the Emergency Arbitrator “shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure.”

The bench has directed to attach all properties of all the respondents, further the FRL shall not take any action and all the Respondents shall file a status report at least three days before the next date of hearing.

Justice Midha had noted, “This Court is of the prima facie view that the Emergency Arbitrator is an Arbitrator; the Emergency Arbitrator has rightly proceeded against the respondent No 2 (Future Group).”
On the last date of hearing, Senior Advocate Gopal Subramanium, appearing for Amazon, had submitted, “The respondents have deliberately and willfully violated and are continuing further with the violation of the order dated October 25, 2020 of the ‘Emergency Arbitrator and immediate interim order be passed to protect the petitioner’s rights till the pronouncement of the reserved order.”

It was further contended that any delay in the protection order would cause irreparable loss to Amazon.

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The bench had also asked Biyani and others to appear before the Court on the next date of hearing, while listing the matter for further hearing on April 28.

Jeff-Bezos-led Amazon is locked in legal disputes with Biyani-headed Future. It has alleged that the retail conglomerate violated an agreement with the American e-commerce firm by agreeing to sell its assets to Mukesh Ambani-owned Reliance Industries last year.

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