Future Retail has contended that if the deal with Reliance doesn’t go through, it would cause “unimaginable” damage to the group, including potential job losses for 35,575 employees.

Kishore Biyani
Atom Dispute Monday, August 30, 2021 - 16:24

Kishore Biyani-led Future Retail Limited (FRL) on Saturday, August 28 filed a plea in the Supreme Court against an order by the Delhi High Court to maintain status quo in relation to the company’s Rs 24,713 crore deal with Reliance Retail and directing it to enforce the order of the Singapore-based Emergency Arbitrator (EA). “Please be informed that the company has filed a special leave petition before the Supreme Court against the impugned orders dated February 2. 2021 and March 18, 2021 passed by ‘Ld. Single Judge’. The SLP will be listed for hearing in due course,” FRL said in a regulatory filing.

The company, in its petition, has stated that “there is extreme urgency to hear” and “stay the Impugned Orders” passed by the single-member bench of the Delhi High Court, failing which the company would go into liquidation. FRL has further contended that if the deal with Reliance doesn’t go through, it would cause “unimaginable” damage to the group, including potential job losses for 35,575 employees, and put at risk around Rs 28,000 crore in bank loans and debentures. “The solvency of over 8,050 SMEs (excluding SMEs of Future Enterprises Limited) and their employees is at stake,” it added.  

The scheme filed before the Mumbai bench of NCLT, involves consolidation of Future Group's retail and wholesale business, and the logistics and warehousing business into a single entity called Future Enterprises Ltd and then transferring it to Reliance Retail Ventures Ltd (RRVL), an RIL arm, as per the Rs 24,731 crore deal with Reliance Industries Limited (RIL). Amazon, an investor in Future Coupons, which in turn is a shareholder in FRL, has contested the deal. Amazon has accused FRL of violating contracts when it sold its retail assets to RIL last year. 

On October 25 last year, an Emergency Arbitrator (EA) of the Singapore International Arbitration Centre (SIAC) had restrained the Future group from going ahead with its Rs 24,731 crore deal with RIL after Amazon had approached the SIAC on the issue. On February 2, 2021, a single-judge bench of the Delhi High Court had directed FRL to maintain status quo in relation to its deal with Reliance Retail. Justice J R Midha said the court was satisfied that an immediate interim order was required to be passed to protect the rights of Amazon.

The court on March 18 upheld the Singapore-based EA’s order restraining FRL from going ahead with its deal with Reliance Retail to sell its business. Justice JR Midha directed FRL not to take further action on the deal with Reliance and held that the group had willfully violated the EA's order. The High Court rejected all the objections raised by Future Group and imposed a cost of Rs 20 lakh on it as well as its directors.

Earlier this month, Future group promoters, including Kishore Biyani and several group holding companies, had approached the Supreme Court against an order passed by the Delhi High Court directing to enforce the order of the Singapore-based Emergency Arbitrator. The apex court on August 6 had ruled in favour of Amazon and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.

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