The Supreme Court Friday asked whether it can pass any interim order on a plea of Amazon that Future Retail Ltd’s assets including ‘Big Bazaar shops’ not be alienated till the dispute over its merger with Reliance Retail is decided by the arbitral tribunal.
A bench headed by Chief Justice N V Ramana, which has now posted the plea of US e-commerce major for further hearing on April 4, said the landlords of the FRL’s shops are not before it and the question is if such an order restraining the alienation of assets till the conclusion of arbitration can be passed.
“If tenants or landlords are not before us how can the court pass an order injuncting them from taking possession (of shops),” said the bench which also comprised Justices Krishna Murari and Hima Kohli.
At the outset, senior advocate Gopal Subramanium, appearing for the US firm, said that as far as the resumption of the arbitration proceedings is concerned, there was no difference of opinion between Amazon and Future group.
“But there cannot be a sudden handover of assets,” Subramanium said, adding that the US firm needed an interim order “against alienation of the assets in favour of any other party and assets must continue to remain with FRL and operate with FRL until the matter is resolved by the arbitral tribunal.” He said that over 800 shops of FRL have been vacated and taken over by the Reliance group.
Senior advocate Harish Salve, appearing for FRL, said that around 374 shops are with the group and it is not going to give them to anybody on its own unless some landlords throw them out.
“My bank accounts are frozen I can’t pay rent. Everyone is hoping if the scheme gets through Reliance comes in and everyone will get the money,” he said, adding that there was no money to pay the rentals and moreover if the lending banks come it then the IBC (Insolvency and Bankruptcy Code) will come in the picture.
The bench was also told by senior advocate Rakesh Dwivedi, appearing for lending banks of Future group, that no interim order, which is prejudicial to the interests of the banks, be passed in the matter.
During the hearing, the counsel for Amazon said that as per the annual accounts of Future group firm, it had enough money to play all rentals.
“This is a sham… There is not the slightest compelling evidence to suggest that any of these landlords asked for the leases. This is just a smokescreen,” Subramanium said.
Another senior advocate Aspi Chinoy, appearing for the US firm, said the transfer of FRL’s shops was collusive.
The bench then asked the Future group counsel as to what would happen if the arbitral award goes in favour of Amazon and how that will be implemented.
If the IBC is invoked by lending banks then Amazon will have to get in queue of unsecured creditors, Salve, appearing for FRL, said.
The bench took note of the submissions of both sides that they have no objection to the resumption of arbitral proceedings and said, “the first issue about going ahead with the arbitration is concerned, both of you agreed.
“You both file a small memo so that we can record it and the SLP can be disposed of. The other aspect is this IA which is regarding non-alienation of properties,” it said.
The bench has now posted the matter for further hearing on April 4 when Amazon would respond to the submissions of the Future group. Earlier, the bench had assured an early hearing on the plea of Amazon.
Prior to this, Amazon had apprehended the “disappearance” of assets and sought an interim order from the top court to ensure the preservation of assets of Future Retail Ltd besides resumption of arbitration over FRL’s merger deal with Reliance Retail.
The bench had taken note of the allegations of the US firm that the “applecart was being upset” by its rivals and asked the Future group firms, FRL and Future Coupons Ltd (FCPL), to respond to the interim plea of Amazon.
Amazon and Future group are engaged in multi-forum litigation on the issue of FRL’s merger deal to the tune of Rs 24,500 crore with Reliance Retail Ltd after the US e-commerce giant dragged FRL to arbitration at the Singapore International Arbitration Centre in October 2020.
It has been alleged by Amazon that on March 3, as many as 600 stores of FRL were taken away by Reliance.
The plea was vehemently objected to by the Future group lawyers on Tuesday.
The top court was told by Amazon that besides seeking resumption of arbitral proceedings, it wanted an order so that the FRL’s assets are there for it if it wins the arbitration as the “applecart was being upset”.
The bench is hearing Amazon’s appeal against the January 5 order of the Delhi High Court, which stayed the arbitration proceedings before the arbitral tribunal over Future Retail’s merger deal with Reliance Retail.
