Supreme Court grants liberty to Future Group to approach High Court over NCLT proceedings [Future Group Reliance Deal]

Supreme Court on Tuesday directed Future Retail Ltd to approach Delhi High Court seeking permission to obtain approvals on National Company Law Tribunal for its transaction with Reliance.

A bench of the Chief Justice NV Ramana, Justice AS Bopanna and Justice Hima Kohli noted, "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)."

In addition to this, the bench requested the "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."

Senior Advocate Mukul Rohatgi appearing on for the FCPL (Future Coupons Private Limited) has submitted that the Competition Commission of India has revoked initial Amazon-­FCPL share purchase, which effectively nullifies the arbitration.

Whereas, Senior Advocate Gopal Subramaniam appearing for Amazon submitted that up till now FRL has conducted NCLT proceedings in contravention of the order of the Emergency Arbitrator as well as the Enforcement order passed by the learned Single Judge of the Delhi High Court.

In addition to this, Senior Advocate Aspi Chinoy also appearing for Amazon stated that 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.

However, Senior Advocate Harish Salve appearing for Future Group stated "that the proceedings before the NCLT have reached the stage listed at serial no. 8 (Meeting of the shareholders and creditors) as indicated in the abovementioned chart. He further contended that it would take 6­8 months to complete the entire process and for actual sanctioning of the Scheme by the NCLT.

"FRL is incurring expenditure everyday and there is an imminent threat of insolvency. 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," Salve added.

The Delhi High Court had in February 2021 upheld the award of an emergency arbitrator, directing the attachment of the properties of Future Retail Limited. The emergency arbitrator also injected Future Retail from proceeding with the merger with Reliance Retail.

The Future Group had filed a series of litigation against a Delhi High Court order declining stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the SIAC.

Earlier, the apex court had set aside the order of the Delhi High Court upholding the emergency arbitral award which injected Future Group from proceeding with merger with Reliance Retail. The court remanded the matter back to Delhi High Court for fresh consideration.

Case Title: Future Coupons Private Limited Vs. Amazon .com NV Investment Holdings LLC