Amazon had entered into an agreement with Future retail, and now Amazon is of the opinion that Future Retail had violated the said agreement by entering into a parallel agreement with Reliance India Ltd. To that effect, in order to prevent the breach of the said agreement, Jeff Bezos led Amazon filed a plea in the Delhi High Court to maintain status quo of the performance of the latter agreement such that the position of the three parties can be ascertained.
Advocate Gopal Subhramanium, appearing for Amazon, sought an urgent stay in the amalgamation in the Apex Court. A 2-judge bench led by Justice RF Nariman told Amazon that it knows "exactly what is happening, has read each and every page". However, the court refused to comment on the merits of the case at this stage.
Future Retail will have to file its reply in 3 weeks, while Amazon will get two weeks to file its counter reply. The case is likely to be listed for hearing before the top court in the last week of March.
- Amazon and Future Retail had entered into an agreement signed by both parties in August, 2019. Amazon had agreed to buy 49 per cent of one of Future's unlisted firms -- Future Coupons Ltd -- with the right to buy into flagship Future Retail after a period of three to ten years.
- In August 2020, Future reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance Retail Ventures Ltd (RRVL) -- which operates the retail business of RIL -- for Rs 24,713 crore.
- Amazon had approached the Delhi High Court seeking enforcement of the interim order of the Emergency Arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) that had restrained FRL from going ahead with the deal with Reliance.
- The Supreme Court on Monday restrained the National Company Law Tribunal (NCLT) from approving the ₹24,713-crore deal between Kishore Biyani’s Future Retail Ltd (FRL) and Reliance Industries Ltd (RIL), aftercom Inc. filed a plea before the Apex Court.
- The Interim Order passed by the Supreme Court was in favour of the e-commerce Company Amazon.
- The Supreme Court forbade the Future Retail – Reliance merger even if the former held a General Meeting and meeting of the Creditors and sought their opinions via vote about the said deal.
- It made it clear that National Company Law Tribunal, Mumbai Bench will not assent to or sanction the merger in question unless further clarification on this matter is not obtained. Nonetheless, the hearing in front of the Tribunal will continue in its due course.
After the merger between Future Retail and Reliance India Limited was approved by the Competition Commission of India, and the Securities and Exchanges Board of India (SEBI) had granted its approval, Amazon Inc. approached the National Company Law Tribunal, Mumbai Bench, on 26th January, 2021.The Apex Court in its interim order had favoured the petitioner in its plea to maintain status quo in the agreement. It overturned the ruling of the lower Court and granted the stay order that stopped the furtherance of the Future Retail – Reliance India agreement. In the interim order on February 8, the division bench said it was staying the single judge order as firstly, FRL was not a party to the share subscription agreement (SSA) between Amazon and Future Coupons Pvt Ltd (FCPL) and the US e-commerce giant was not a party to the deal between FRL and Reliance Retail.
Due to this legal battle between the Future Retail and Amazon, their share prices are fluctuating. Reliance Industries shares were down 2% at ₹2035 while Future Retail fell 2.6% to ₹74.15 in noon trade on Monday after the interim order was passed. The SC order that was passed, cited the Singapore International Arbitration Centre’s (SIAC) interim award in October barring Future Retail from taking any step to sell its assets or issuing any securities from a restricted party to secure funding. The case is listed for hearing in front of the Hon’ble High Court of Delhi on Friday.
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