Future Retail moves SC to stay HC order, says if not liquidation inevitable

Future Retail said it has approached the Supreme Court against orders passed by the Delhi High Court to maintain the status quo in relation to its Rs 24,713 crore deal with Reliance Retail

Kishore Biyani-led Future Retail Ltd on Saturday said it has approached the Supreme Court against orders passed by the Delhi High Court to maintain the status quo in relation to its Rs 24,713 crore deal with Reliance Retail and directing it to enforce the order of the Singapore-based Emergency Arbitrator.

In a regulatory filing, Future Retail said, "Please be informed that the company has filed a special leave petition before Hon'ble Supreme Court of India against the impugned orders dated 2nd February 2021 and 18th March, 2021 passed by 'Ld. Single Judge'...The SLP will be listed for hearing in due course."

In its petition, the company stated that "here is extreme urgency to hear" and "stay the Impugned Orders" passed by the single-member bench of Delhi High Court, failing to which the company would go into liquidation.

Future Retail, in its petition, said the scheme of amalgamation, which will be listed before the NCLT, cannot go through due to the orders of the High Court.

".... and as a result of which the Scheme which benefits all the stakeholders, including the public at large and various public sector banks may fall through; If the Scheme falls through, it is inevitable that FRL will go into liquidation," it said.

Besides "approximately Rs 28,000 crore of public money in the form of bank loans and debentures issued by FRL and its group companies is also be at risk," said the Future group firm in its appeal.

The magnitude of damage that may be caused to the public at large is "unimaginable" as livelihoods of more than 35,575 employees of FRL and various companies that are part of the Scheme may be lost, it added.

"The solvency of over 8,050 SMEs (excluding SMEs of Future Enterprises Limited) and their employees is at stake.

The scheme filed before the Mumbai bench of NCLT, entails consolidation of Future Group's retail and wholesale business, and the logistics and warehousing business into one entity Future Enterprises Ltd and then transferring it to Reliance Retail Ventures Ltd (RRVL) as per the Rs 24,731 crore deal with Reliance Industries Ltd.

The deal is contested by Amazon, an investor in Future Coupons that in turn, is a shareholder in FRL.

Amazon, had approached Singapore International Arbitration Centre (SIAC), where an Emergency Arbitrator (EA) had on October 25 last year restrained the Future group from going ahead with its Rs 24,731 crore deal with RIL.

Later, the matter was taken to the Delhi High Court, where on February 2, a single bench of Justice J R Midha had directed FRL to maintain status quo in relation to its Rs 24,713 crore 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.

Later, on March 18, the court upheld the Singapore Emergency Arbitrator's (EA) order restraining Future Retail Ltd (FRL) from going ahead with the Rs 24,713 crore deal with Reliance Retail to sell its business, which was objected to by US-based e-commerce giant Amazon.

Justice J R Midha directed Kishore Biyani-led FRL not to take further action on the deal with Reliance and held that the group 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.

Appealing against it, FRL said it has requested the Supreme Court to admit its petition and "against the Impugned judgment and interim Orders dated February 2, 2021 and March 18, 2021 passed" by the single member bench of the high court".

It has also requested the apex court to "pass an ex-parte interim order/ interim order and stay the Impugned judgment and interim Orders dated 2 February 2021 and 18 March 2021 passed by the High Court of Delhi' and any "such other directions as to balance the interest of the parties, till the issues raised herein are finally decided."

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.

In a regulatory filing by Future Retail Ltd on August 12, the company had stated that Kishore Biyani, Rakesh Biyani and other family members of the Biyani family along with the holding companies Future Coupons, Future Corporate Resources, Akar Estate and Finance had filed SLP against Amazon.com NV Investment Holdings LLC before the Supreme Court.

Passing an interim order, the EA of Singapore International Arbitration Centre (SIAC) on October 25 last year restrained the Future group from going ahead with its Rs 24,731 crore deal with Reliance Industries to sell its retail and wholesale business, and the logistics and warehousing business.

The apex court had on August 6 upheld Amazon's plea. It 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.