SC asks Amazon, Future to urge Delhi HC to hear enforcement pleas of US firm first

New Delhi: The Supreme Court on Monday asked the Future Group and Amazon to jointly urge the Delhi High Court on April 5 to first hear the enforcement petitions of the US e-commerce major which also relate to the preservation of assets of Future Retail Limited (FRL).

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 Limited after the US e-commerce giant dragged FRL into arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020.

A bench comprising Chief Justice N V Ramana and Justices Krishna Murari and Hima Kohli, meanwhile, asked Amazon and Future Group to file a “joint memo” before it by Tuesday agreeing to the resumption of arbitral proceedings before SIAC and posted the plea of the US firm for further consideration on April 6.

The bench is hearing Amazon's appeal against the January 5 order of the Delhi High Court, which stayed the proceedings before the arbitral tribunal over Future Retail's merger deal with Reliance Retail.

Senior advocate Gopal Subramanium, appearing for Amazon, said that he was seeking an interim order to ensure that the FRL assets, including "Big Bazaar shops", are not alienated till the dispute over its merger with Reliance Retail is decided by an arbitral tribunal.

The bench asked him why it cannot be dealt with and decided by the single-judge bench of the high court.

“The learned single judge is declining to hear the enforcement petitions and he says that the priority is given to the interim relief in the appeal,” Subramanium said.

The submission was opposed by senior advocate Harish Salve, appearing for FRL, saying that Amazon has argued the same plea before the high court for two days.

“When hearing is going on, judges say things and that is the nature of the game. Ultimately what order comes out may accept one or the other point of view. It is not fair to the judge when you (Amazon) come and say that he is declining. No order has been passed. The learned judge is hearing everything,” Salve said.

To this, the bench said that it may urge the high court to take up the enforcement pleas of Amazon first.

“In all fairness what we feel is that your (FRL) company application can wait and it is important that his (Subramanium’s) interim application has to be considered first,” the CJI said. Salve agreed and said that no order to this effect was needed to be passed as he would support Amazon and make a request to the high court that the enforcement petitions of the US firm are heard first.

In the meantime, the apex court permitted one of the lending banks, Bank of India, of FRL to withdraw its intervention plea from the apex court. Earlier, the bench had heard part arguments on Amazon's plea on April 1 and had posted the case for the conclusion of submissions on April 4.

It had questioned whether it could pass an interim order restraining FRL from alienating its assets till the decision of the arbitral tribunal comes in view of the fact that no landlord of "Big Bazaar shops" was present before it as a party.

"If tenants or landlords are not before us, how can the court pass an order injuncting them from taking possession (of shops)," it had said.

Subramanium had said that as far as the resumption of the arbitration proceedings is concerned, there is no difference of opinion between Amazon and Future Group.

"But there cannot be a sudden handover of assets," Subramanium had said, adding that the US firm needs an interim order "against alienation of the assets in favour of any other party and the assets must continue to remain with FRL and operate with FRL until the matter is resolved by the arbitral tribunal".

He had said over 800 shops of FRL have been vacated and taken over by the Reliance group.

Harish Salve, appearing for FRL, had said around 374 shops are with the group and it is not going to give those to anybody on its own unless some landlords throw them out.

"My bank accounts are frozen and I cannot pay rent. Everyone is hoping that if the scheme gets through, Reliance comes in and everyone will get the money," he had said, adding that there is no money to pay the rentals and moreover, if the lending banks come into the picture, the IBC (Insolvency and Bankruptcy Code) will come into play.

Amazon had apprehended the "disappearance" of assets and sought an interim order from the top court to ensure the preservation of the FRL assets, besides the 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 Limited (FCPL) -- to respond to Amazon's interim plea.

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 the resumption of the arbitral proceedings, it wants an order so that FRL's assets are there for it if it wins the arbitration as the "applecart was being upset".