Delhi HC to hear Future’s plea against status quo on Reliance deal

An Amazon spokesperson said the company has not only been committed to an early resolution of the dispute with the FRL but continued to be willing to support it even during the temporary financial challenges posed by Covid-19

The Delhi High Court will on Thursday hear a plea by Future Retail Limited (FRL) challenging the status quo on its $3.4 billion sale of retail assets to Reliance Industries Limited.

Representational image.

FRL’s lawyer, Darius Khambata, mentioned the matter urgently before the court on Wednesday and asked it to hear the matter on the same day after the status quo order was passed by a single bench of the high court. Opposing the urgent mentioning, senior advocate Rajiv Nayyar, who appeared for Amazon, said the procedure of the court should be followed. Following this, the matter was posted for hearing on Thursday.

An Amazon spokesperson said contrary to reports carried in a section of the media, the company has not only been committed to an early resolution of the dispute with the FRL but had continued to be willing to support it even during the temporary financial challenges posed by Covid-19.

In an interim order on Tuesday, Justice JR Midha ordered FRL to maintain the status quo on the assets starting at 4.50 pm on Tuesday until “the pronouncement of the reserved order”. It was passed on a petition by Amazon, which has alleged that the deal was in violation of its contract with FRL.

The court said it was of the prima facie view that a Singapore tribunal order, which asked FRL not to proceed with the deal, was enforceable in India.

On October 25, the Singapore International Arbitration Centre passed an interim order in favour of Amazon, barring FRL from taking any steps to dispose of or encumber its assets or issuing any securities to seek any funding against them.

The high court rejected FRL’s submission that Amazon’s petition was not maintainable because an Emergency Arbitrator (Singapore)cannot be considered an arbitrator under the Arbitration and Conciliation Act.

“This court is of the prima facie view that the Emergency Arbitrator is an Arbitrator; the Emergency Arbitrator has rightly proceeded against FRL; the order dated October 25, 2020 is not a nullity; the order dated October 25, 2020 is an order under Section 17(1) of the Arbitration and Conciliation Act,” Midha said in his Tuesday’s order.

Citing the Emergency Arbitrator’s order, the high court said it was subject to appeal under Section 37 of the Arbitration and Conciliation Act as well because it was an “enforceable” order.