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Future Reliance deal: Delhi High Court stays single judge order on status quo

The Future Group had filed the appeal against the single judge order directing status quo on the FRL-Reliance Deal on Amazon's instance.

In a small relief to the Future Group, the Delhi High Court on Monday stayed the order of the single judge directing a status quo on the Future-Reliance deal.

Passing the order, a division bench of Chief Justice D.N. Patel and Justice Jyoti Singh observed that since Future Retail Limited (FRL) is not a party to Arbitration Agreement, prima facie, group of companies doctrine can’t be invoked.

It further noted that in preliminary findings there was no reason to seek a status quo order from single judge. “Statutory authorities like SEBI cannot be restrained from proceeding in accordance with law,” the bench said. 

The division bench also stated that the observations made by it are only prima facie and the single judge shall not be influenced by it while passing his order.

The order was passed while the court was hearing an appeal filed by Future against an order of the single judge, directing it to maintain status quo on its Rs 24,713-crore deal with Reliance that has been earlier objected to by Amazon.

During the course of arguments, Amazon Inc. had told the court, “It is committed to help Kishore Biyani-led Future Group from sinking.”
Representing Amazon, senior advocate Gopal Subramanium argued, “We are constantly committed to help FRL. It’s not that we can’t find a solution, we ourselves don’t want the company to sink.”

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It was also argued by Subramanium while referring to various judgments that if Section 17 (2) of the Arbitration Act is the solution and nothing has happened to the Emergency then the same is enforceable. “If the Emergency Arbitrator is an Arbitral tribunal, it has to be under the same section 17(2),” he added.

“It was found by the single judge (Justice Mukta Gupta) that my interference had lawful justification,” Amazon told the court through Subramanium. 

Earlier, Senior advocate Harish Salve appearing for Future argued that Amazon entered into an agreement with Future Coupons Limited running the business of loyalty coupons. Senior Advocate Rajiv Nayar appearing for the respondents submitted, “If Your Lordship hears the matter on maintainability, Your Lordship may save time.”

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Salve further submitted, “On behalf of FRL we argued, we had an agreement with FCPL and Biyanis. I don’t have any agreement with Amazon, that is why there is no arbitration. Amazon says I have an agreement with FCPL, FCPL has an agreement with FRL.” Whereas the single judge bench observed that these are single economic transactions I’ll consider all of them together, it becomes a single integrated transaction, he said.

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