The Supreme Court on Tuesday granted Future Retail Ltd. (FRL) liberty to approach the Delhi High Court seeking permission to resume proceedings before the National Company Law Tribunal (NCLT) in connection with a Rs. 24,731-crore merger deal with Reliance Industries’ retail arm, which has been disputed by U.S. e-commerce giant Amazon.
“We grant liberty to FRL to approach the High Court by filing an application seeking continuation of the NCLT proceedings beyond the eighth stage (meeting of shareholders and creditors),” a three-judge Bench led by Chief Justice of India N.V. Ramana ordered.
The apex court requested the Single Judge of the Delhi High Court “to consider all the contentions raised by both the parties in this regard and pass appropriate order as to continuation of the NCLT proceedings beyond the stage and other regulatory approvals expeditiously, uninfluenced by any observations made herein”.
FRL, represented by senior advocate Harish Salve, had argued that the NCLT proceedings had reached the eighth stage, and submitted that it would take six to eight months to complete the entire process and for actual sanctioning of the scheme for the sale of its assets by the NCLT. In this context, if an order was passed by the Arbitral Tribunal, it would be difficult to initiate fresh proceedings before NCLT.
The Arbitral Tribunal had last year dismissed the applications of the Future group to vacate an award of the Emergency Arbitrator injuncting FRL from taking steps to materialise the deal. The Tribunal’s order was challenged by Future in the Delhi High Court, which had issued notice, but refused any immediate relief.
Mr. Salve had submitted that FRL was incurring expenditure everyday and there was an imminent threat of insolvency. Any delay in the proceedings before the NCLT would have serious ramifications and virtually render the agreement between FRL and Reliance redundant, he had submitted in the hearing of the case.
“Furthermore, the livelihood of 22,000 employees of FRL were also at stake. In the same breath, he has submitted that continuation of the NCLT proceedings will not adversely affect Amazon in any manner,” the court recorded the senior lawyer’s submissions in its 12-page order.
The Supreme Court had on February 3 reserved its order on the plea of FRL seeking continuation of the merger deal process before the NCLT.
Prior to this, the Supreme Court, in a verdict on February 1, had set aside three Delhi High Court orders including attachment of properties of FRL and its directors and the refusal to grant a stay on the final arbitral award which had restrained FRL from going ahead with its ₹ 24,731 crore merger deal with Reliance Retail and had ordered fresh adjudication.
Amazon and the Future group have been engaged in a legal battle for over a year as the US major is opposing the merger of FRL with Reliance Retail. eom
