The Supreme Court on Tuesday granted liberty to Future Retail Limited (FRL) to approach the Delhi High Court by filing an application seeking continuation of NCLT proceedings beyond the meeting of shareholders and creditors.
Aggrieved by the sale transaction between Future Retail Limited (FRL) Reliance Group, Amazon initiated an arbitration proceeding before the Singapore International Arbitration Center (SIAC), in terms of Future Coupons Pvt. Ltd. (FCPL)Amazon agreements.
Amazon filed an application for emergency relief with the registrar of the SIAC court of arbitration seeking interim prohibitory injunction to prevent FRL and FCPL from taking further steps in the aforesaid transaction with the Reliance group. Parallelly, FRL filed a suit before the Delhi High Court against amazon for tortious interference in the scheme for the sale of assets.
Emergency Arbitrator, by order dated 25.10.2020, injuncted FRL from taking any steps to materialize the deal, including injunction against proceedings before various Regulatory authorities. However, by order dated 21.12.2020, Delhi High Court came to a conclusion that Regulatory authorities had to pass appropriate orders considering the representation of both FRL and Amazon, before granting approvals.
In the meanwhile, Competition Commission of India (CCI) and SEBI approved the Scheme following the filing of the FRL suit. Further, FRL filed sanction of the composite Scheme of Arrangement under the provisions of Section 230 to 232 of the Companies Act, 2013 before National Company Law Tribunal (NCLT) for its consideration on 26.01.2021, which is pending.
Amazon filed a Petition for enforcement of Emergency Arbitrator award before the Delhi High Court on 25.01.2021. Vide orders dated 02.02.2021 and 18.03.2021, Delhi High Court passed orders inter alia, enforcing the emergency award.
When the matter was carried by Amazon to this Court vide order dated 22.02.2021, the Top Court allowed the NCLT proceedings to continue without culminating in a final order of Sanction of Scheme.
However the Apex Court by final order dated 06.08.2021, did not adjudicate the merits of the case and limited its reasoning only to answering the legal questions concerning the maintainability of a first appeal against an order of the Single Judge in an enforcement proceeding.
Aggrieved by the merits of the orders of the Single Judge dated 02.02.2021 and 18.03.2021 Delhi High Court passed orders inter alia, enforcing the emergency award.
When the matter was carried by Amazon to this Court vide order dated 22.02.2021, the Top Court allowed the NCLT proceedings to continue without culminating in a final order of Sanction of Scheme.
However the Apex Court by final order dated 06.08.2021, did not adjudicate the merits of the case and limited its reasoning only to answering the legal questions concerning the maintainability of a first appeal against an order of the Single Judge in an enforcement proceeding.
Aggrieved by the merits of the orders of the Single Judge dated 02.02.2021 and 18.03.2021, FCPL and FRL filed appeals directly before the Top Court.
Harish Salve, Senior Counsel appearing for FRL stated that it would take six to eight months for completing all the fifteen steps set out above. He finally submitted that it is only when the final Scheme is sanctioned by the NCLT that the retail assets of FRL would get alienated. So long as the final order of sanctioning is not passed by the NCLT, Amazon is not prejudiced in any manner.
Mukul Rohatgi, Senior Counsel appearing on behalf of FCPL has submitted that the Competition Commission of India has revoked initial AmazonFCPL share purchase, which effectively nullifies the arbitration. He submitted that these facts have bearing on the continuation of the proceedings which needs to form a part of consideration.
Accordingly, he submitted that he is willing to argue on the consideration before the High Court in remand.
On the contrary, Gopal Subramanium, Senior Counsel appearing for Amazon submitted that up till now FRL has conducted NCLT proceedings in contravention of the order of the Emergency Arbitrator as well as the Enforcement order passed by the Single Judge of Delhi High Court in . He stated that the order of the Apex Court dated 01.02.2022 has clearly remanded the matter for reconsideration by the High Court.
A bench comprising Chief Justice N.V. Ramana Justices A.S. Bopanna and Hima Kohli observed after hearing the submission grant liberty to FRL to approach the High Court by filing an application seeking continuation of the NCLT proceedings beyond the 8th Stage (Meeting of Shareholders and creditors).
“Accordingly, we request the learned Single Judge of the
of the Delhi High Court, to consider all the contentions raised by both the parties in this regard and pass appropriate order as to continuation of the NCLT proceedings beyond the stage mentioned at serial no. 8 and other regulatory approvals expeditiously, uninfluenced by any observations made herein”, the order read.