NEW DELHI: Pushing for ownership over the litigation mired assets of Future Retail owned by beleaguered Biyani group, a consortium of 27 banks on Thursday told the Supreme Court that the best way out of the present mess is to ask both Reliance Retail and Amazon to make open competitive bids for Future Retail assets with a base price of Rs 17,000 crores.
The consortium, which also included 10 private and three foreign banks, through senior advocate Rakesh Dwivedi told a bench of Chief Justice N V Ramana and Justices A S Bopanna and Hima Kohli that the current outstanding against FRL is around 17,000 crores and that the loans were advanced between 2015-20, much before Amazon initiated Arbitration proceedings to shut out Reliance from acquiring Future's retail chain of stories.
"Since the loans and repayments were governed by separate agreements between the banks and FRL, both Amazon and Reliance can have no say on the manner in which the banks, which are repositories of public money, want to monetise the FRL assets. The contracts - Future Coupons' with Amazon and FRL's with Reliance - are private in nature but the agreement between FRL and banks involve public interest," Dwivedi said.
He said that the best way to resolve this Amazon-Future Retail-Reliance Retail litigation is to put FRL assets up for public competitive bidding with a reserve price of Rs 17,000 crore, which is the default loan amount against Future Retail. "Let Amazon and Reliance participate in the open competitive bidding and whosoever pays the highest price could takeover the Future Retail assets and at the same time the banks too would get back their outstanding dues," he said.
While Reliance Retail has offered Rs 25,000 crore to acquire the assets of FRL with a promise not to retrench a single of the 25,000-odd employees engaged in these retail chain of stores, Amazon has offered only Rs 7,000 crore. Appearing for Future group, senior advocate Harish Salve said that there is merit in the bank's suggestion and argued that Amazon cannot put in a single penny as investment in retail business because of a statutory bar. He said Future would hold talks with banks in the next two weeks to find a way out.
For Future Coupons, senior advocate Mukul Rohatgi said that there is no arbitration clause subsisting between the group and Amazon as the Competition Commission has put in abeyance its 2019 approval for Amazon's Rs 1,400-odd crores investment to acquire stake in Future Coupons and through which it later initiated arbitration to shut out Reliance Retail from striking a deal with Future Retail.
For Amazon, senior advocates Gopal Subramaniam, Aspi Chinoy and Ranjit Kumar said that Amazon has got an interim award from Emergency Arbitrator restraining Future group from going ahead with the Reliance deal and yet they argue as if there is no restriction on them to continue with the process to sale assets to Reliance Retail. "Unless the Emergency Arbitrator's award is set aside in the final award of the Arbitrator, there is no way the deal with Reliance can proceed," they argued.
SC had on Tuesday set aside all interim orders of the Delhi High Court and asked it to hear on a clean slate all aspects of the Future-Amazon-Reliance dispute over acquisition of the FRL assets. On Thursday, the CJI-led bench said that it would pass orders on the Future's plea for going ahead with the scheme for sale of assets to Reliance Retail and filing it for approval before National Company Law Tribunal (NCLT).
