Future Retail gets a lifeline from the Apex Court
In what could be a setback to Amazon, the Supreme Court of India on Tuesday granted liberty to Future Retail Ltd (FRL) to move the Delhi High Court for seeking nod to proceed with the National Company Law Tribunal (NCLT) permission of going ahead with the Rs.24,731 crore merger deal with Mukesh Ambani headed Reliance Retail. “We grant liberty to FRL to approach the Delhi High Court for seeking continuation of proceedings before the NCLT…We request the single judge (of the High Court) to pass orders”, a bench headed by Chief Justice N V Ramana said.
The bench, also comprising Justices A S Bopanna and Hima Kohli, said that the high court should consider the plea of Future Retail on the issue without being influenced by the observations made in its order. The apex court on February 3 had reserved its order on the plea of FRL seeking continuation of the merger deal process before the NCLT.
Prior to this, the apex 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 Rs.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. Amazon and Reliance are engaged in a bitter battle for the past three years for the takeover of Kishore Biyani headed Future Groups’ Biz Bazar, India’s biggest retail shop chain established in 2001. Future Retail has 1,800 retail stores across 400-plus cities and towns across India. Amazon, which intended to deliver products in select cities within two hours of a customer ordering them, looked at Future’s stores as intrinsic to its plan. Any alliance between Future and Amazon would have given the latter a massive advantage in the consumer experience.
Similarly, for Reliance, a deal with Future Retail would have established it firmly as India’s largest retailer with a presence in smaller cities and towns almost overnight, also helping the Mukesh Ambani-led company in last-mile access for its eCommerce delivery to small towns. The deal with Future Retail would have also given Reliance the leadership position in the online and offline retail segments. The intricacies of the corporate battle are well explained in this article published by the Hindustan Times newspaper.[1]
Reference:
[1] Decoding the multilayered Amazon-Future-Reliance legal drama – Jan 10, 2022, HT
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