The Division Bench of the Supreme Court consisting of Chief Justice N.V. Ramana and Justices A.S. Bopanna and Hima Kohli in an appeal allowed Future Retail to move Delhi High Court for NCLT Proceedings.
Facts
Aggrieved by the sale transaction between Future Retail Limited (FRL) Reliance Group, Amazon initiated an arbitration proceeding before the Singapore International Arbitration Center (SIAC), in terms of Future Coupons Pvt. Ltd. (FCPL)Amazon agreements. Amazon filed an application for emergency relief with the registrar of the SIAC court of arbitration seeking interim prohibitory injunction to prevent FRL and FCPL from taking further steps in the aforesaid transaction. Parallelly, FRL filed a suit before the Delhi High Court against amazon for tortious interference in the scheme for the sale of assets.
Procedural History
Emergency Arbitrator injuncted FRL from taking any steps to materialize the deal. However, the High Court concluded that Regulatory authorities had to pass appropriate orders considering the representation of both FRL and Amazon, before granting approvals. Meanwhile, CCI and SEBI approved the Scheme following the filing of the FRL suit. Further, FRL filed sanction of the composite Scheme of Arrangement u/s 230 to 232 of the Companies Act, 2013 before National Company Law Tribunal (NCLT) for its consideration, which is pending. Amazon filed a Petition for enforcement of Emergency Arbitrator award before the Delhi High Court, which passed orders inter alia, enforcing the emergency award.
When the matter was carried by Amazon to this Court this Court allowed the NCLT proceedings to continue without culminating in a final order of Sanction of Scheme. However, this Court did not adjudicate the merits of the case and only answered the legal questions concerning the maintainability of a first appeal against an order of the learned Single Judge in an enforcement proceeding. Aggrieved, FCPL and FRL filed appeals directly before this Court, wherein the Court stayed all further proceedings before the High Court for the time being. Thereafter, the applications filed by FRL and FCPL for vacating the award of the Emergency Arbitrator was dismissed by the Arbitral Tribunal, which was challenged by FCPL and FRL before the Delhi High Court. The High Court rejected immediate relief to FRL. Aggrieved, FCPL and FRL approached this Court, which granted them leave.
Contentions Made
Appellant: The NCLT proceedings for grant of final approval of the proposed Scheme ought to continue as the culmination in the final order would take six to eight months for completing all the steps as required under the Companies Act, 2013. It is only when the final Scheme is sanctioned by the NCLT that the retail assets of FRL would get alienated. So long as the final order of sanctioning is not passed by the NCLT, Amazon is not prejudiced in any manner. If an order is passed in favour of FRL, then it will be difficult to initiate fresh proceedings before NCLT at that stage. Any delay in the proceedings before the NCLT will have serious ramifications and virtually render the agreement between FRLReliance group redundant. Furthermore, the livelihood of 22,000 employees of FRL are also at stake.
Respondent: The CCI has revoked initial AmazonFCPL share purchase, which effectively nullifies the arbitration. These facts have bearing on the continuation of the proceedings which needs to form a part of consideration. FRL and FCPL are not entitled for any interim relief as they have not challenged the initial order of the Emergency Arbitrator, which is binding on them.
Observations of the Court and Judgment
The Bench observed that:
“We grant liberty to FRL to approach the High Court by filing an application seeking continuation of the NCLT proceedings beyond the 8th Stage (Meeting of Shareholders and creditors). Accordingly, we request the learned 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 mentioned at serial no. 8 and other regulatory approvals expeditiously, uninfluenced by any observations made herein.”
Case Name: Future Coupons Private Limited & Ors. vs Amazon.Com NV Investment Holdings LLC & Ors.
Citation: CIVIL APPEAL NOs. 859-860 OF 2022
Bench: Chief Justice N.V. Ramana, Justice A.S. Bopanna, Justice Hima Kohli
Decided on:15th February 2022
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