Rs 27,000 Crore Future Group-Reliance Deal Put On Hold By Delhi HC; Status Quo To Be Enforced
A status quo has been directed by the single-judge bench of the Justice JR Midha of the Delhi High Court between the Future Group and billionaire Mukesh Ambani-led Reliance Retail Ventures Ltd on the Rs 27,513-crore deal.
The court, till the pronouncement for the reserved order, has said that it is satisfied that immediate orders of the petitioner (Amazon.com Inc.).
As on today at 4:49 PM, Delhi High Court said that in the view of this matter, they have directed the respondents (Future Group) to maintain status quo till the pronouncement of the reserved order.
After the conditional approval to Future Group’s scheme of arrangement and sale of its assets to the retail arm of Reliance Industries Ltd by Securities and Exchange Board of India (SEBI), Amazon.com NV Investment Holdings LLC had approached the court.
Disobeyance Of Arbitrator’s Order : Amazon
Amazon, in its petition dated Jan. 25, has argued that the directions of the Emergency Arbitrator have been ignored by the by the Kishore Biyani-led Future Group. Amazon also said that in order to get approved the transaction, they have continuously pursued regulatory authorities. It said that the Future Group, has maliciously and deliberately disobeyed the arbitrator’s order.
Under the section 17(2) of the Arbitration and Conciliation Act, 1996, the company sought recognition and enforcement of the emergency arbitrator’s order. There is a provision in the same which allows a party to seek enforcement of an interim order passed by an arbitral tribunal in the same manner as it would for a court order.
As a counter, Future Group has called the order itself a nullity by arguing that for the purposes of section 17(2), emergency arbitrator doesn’t qualify as an arbitral tribunal.
Under the section 17(2) of the Arbitration and Conciliation Act, 1996, the company sought recognition and enforcement of the emergency arbitrator’s order. This provision allows a party to seek enforcement of an interim order passed by an arbitral tribunal in the same manner as it would for a court order.
The high court said that:-
- The emergency arbitrator is an arbitrator and the order dated Oct. 25, 2020, (the emergency arbitrator’s order) isn’t a nullity.
- The order dated Oct. 25 is enforceable under section 17(2) of the Arbitration and Conciliation Act, 1996.
The Directions Of The Court:-
As per the directions of the court, an affidavit giving details of actions taken by them after Oct. 25 and the present status of all those actions has been asked to be produced by Future Group. The timeline for the reply has to be filed within 10 days.
Within 10 days of receipt of the order, all authorities has also been directed to maintain status-quo with respect to all matters in violation of the orders dated Oct. 25, 2020.
Future Retail Ltd has informed the stock exchanges that it will explore all legal remedies and take appropriate steps to pursue the scheme of arrangement.