With talks of an out-of-court settlement between Future Group and Amazon failing, the e-commerce major on Wednesday urged the Supreme Court to restrain Reliance Industries (RIL) from opening any new stores in the premises where the stores of Future Retail (FRL) were located till the time the arbitration tribunal in Singapore disposes of the matter related to the dispute.
“Pass an order restraining the opening of any new store in place of FRL’s retail assets at the same premises…. or, in the alternative declare the purported alienation of FRL’s retail assets, being in clear breach of the restraint orders, as null and void,” Amazon, which is involved in a legal dispute with Future over its sale of retail assets to Reliance Retail, said in its fresh application.
The Supreme Court will hear the matter on March 23.
Amazon’s fresh petition in the SC assumes significance because the stores owned by FRL have been taken over by Reliance Retail since last month with Future defaulting on rent payment. The landlords of the shops had cancelled the lease rentals of FRL upon payment default and leased them to Reliance, which had then sub-leased them to Future.
Some 950 stores were thus taken over by Reliance which has now shut them after terminating the sub-leases to Future. According to Reliance’s plans, the stores would be reopened after re-branding them as Reliance Retail stores once the reconciling of stock and other inventory is over.
Amazon has objected to such a move on the part of Reliance and said in the court on Wednesday that it goes against the interim orders of the Singapore tribunal, as well as of SC, both of which had directed that the status quo be maintained on the Future-Reliance deal. Amazon said that if FRL stores are taken in this manner then the entire purpose of going ahead with the arbitration gets defeated.
In a public notice on Tuesday, Amazon had said, “FRL was on the verge of purportedly allowing handing over of the retail assets to the MDA (Mukesh Ambani) Group…these actions have been done in a clandestine manner by playing a fraud on the constitutional courts of India”.
Senior counsel Gopal Subramanium, appearing for Amazon argued on Wednesday that the tribunal had already granted protection (against alienation of Future group’s assets) and “if there has been no adherence of the order passed in 2020 till now, then there is no point to filing another application before the tribunal”.
The Future Group also showed a willingness to resume the arbitration process that was stayed by Delhi High Court in January.
Accusing the Future Group of committing “fraud,” Amazon stated that FRL had transferred its stores to Reliance after giving assurance to the SC on September 9, 2021, that its retail assets will continue to vest with it till the final order on sanctioning of the merger scheme comes from the National Company Law Tribunal.
On March 9 in a stock exchange filing, FRL said that it was no longer the lessee of its stores and had surrendered around 900 stores (contributing 55% – 65% of the total revenue of FRL) to Reliance, between February and March where it was carrying on its retail business.
The circumstances in which the surrender of the leases resulted in the transfer to the Mukesh Dhirubhai Ambani (MDA) Group, and thereafter the latter giving a licence to FRL to continue to operate out of the very same premises as a licensee, and the subsequent surrender of such licences that resulted in Reliance ‘taking over and operating’ the 950 retail premises, “establishes that the entire transaction was nothing but a guise and a stratagem wrongfully adopted by FRL, with the connivance and collusion of the MDA Group, to transfer the retail assets,” Amazon said in its 371-page application.
