A bench comprising Justices R.F. Nariman, B.R. Gavai and Hrishikesh Roy passed the order in response to a special leave petition filed by Amazon on 8 April
The Supreme Court on Monday halted all legal proceedings between Amazon.com Inc. and Future Group in the Delhi high court over the Kishore Biyani-led retail chain’s proposed ₹24,713 crore asset sale to Reliance Industries Ltd.
A bench comprising Justices R.F. Nariman, B.R. Gavai and Hrishikesh Roy passed the order in response to a special leave petition (SLP) filed by Amazon on 8 April, challenging a Delhi high court division bench order that allowed Future Group to proceed with the asset sale to Reliance Industries until the Supreme Court decides otherwise.
On 22 March, the division bench granted Biyani a reprieve from an 18 March order of a single judge of the same court that restrained the Future Group from taking any steps to sell its assets to Reliance Industries. Justice J.R. Midha had also ordered a show-cause to be served on the group for his possible detention.
“The matter will anyway end up here. Why don’t we finish hearing?" Justice Nariman said on Monday. The matter will be listed next on 4 May, and the parties have been directed to complete their pleadings by then.
In its plea in the Supreme Court, Amazon has termed the division bench’s 22 March order as “illegal", “random", inequitable and unfair, and has requested the apex court to prevent Amazon from suffering “irreparable" damage in its business in India.
Amazon’s key objective is to prevent Reliance Industries from gaining the upper hand in India’s retail market by acquiring the assets of Future Group, which owns more than 1,500 Big Bazaar and fbb stores.
If the Reliance-Future deal goes through, Amazon fears it may not be able to serve its customers with the same ease and speed as it was able to after entering into an agreement with Future Coupons Pvt. Ltd, a part of the Future Group.
Amazon agreed to buy a 49% stake in Future Coupons in August 2019 on the condition that Future Group does not forge any alliance with Reliance Industries and 29 other entities without obtaining prior consent from the US e-commerce giant.
In an interim order following another petition filed by Amazon earlier, the Supreme Court on 22 February directed the National Company Law Tribunal (NCLT) not to give its final approval on a scheme of amalgamation until the top court gives its verdict.
In the latest petition, Amazon said the division bench does not have the authority to stay the 18 March single judge’s order and pass another order on the matter until the Supreme Court gives its verdict.
“Given that this Supreme Court is already seized of the matter, particularly with respect to the maintainability of an appeal against an order passed under Section 17(2) of the Act, judicial propriety demanded that the division bench should have stayed its hands, and not passed any further orders in the matter," said Amazon’s latest petition.
The same argument was made by senior advocate Iqbal Chagla, appearing on behalf of the Biyanis, in March.
“Propriety demanded that since the Supreme Court was seized of the matter, the learned single judge (Midha) ought not to have passed such an order, especially when the division bench had stayed the earlier order. On this ground alone, the order dated 18 March 2021 should be stayed," Chagla had argued before the division bench.
Amazon said if the single judge’s order is interfered with, it will reduce the Singapore arbitration tribunal’s ruling staying Future’s Group’s asset sale to Reliance to merely a “paper order".
“The important question of law that arises is whether or not an order passed by a validly appointed EA (emergency arbitrator) ought to be recognized and enforced under Section 17(2) of the Act. This aspect of the matter has wide ramifications far beyond the present SLP and impacts the desirability of India as an arbitration-friendly jurisdiction," said Amazon, which is competing against rivals, including Walmart-led Flipkart and Reliance Industries, for gaining a beachhead in India’s burgeoning retail market.
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