Future Retail Seeks Lifting Of Status Quo On Reliance Deal
Future Retail seeks lifting of status quo on deal with Reliance.
The Future Group asked the Delhi High Court to lift status quo on sale of its retail assets to Reliance Retail Ltd., arguing that Amazon.com Inc. can be compensated for its losses, if any, even after the deal goes through.
Senior Advocate Harish Salve, representing Future Retail Ltd., questioned the need for the status quo ordered by a single-judge bench on Feb. 2. The application seeking approval for the transaction is pending before the National Company Law Tribunal and valuable time will be lost if the order was not stayed. Salve said the judge even ordered statutory authorities to maintain a status quo.
"How can such an order be passed? Future Retail has been asked to file a report. They are not parties to this enforcement (arbitration agreement)," Salve told the court.
Justice JR Midha on Tuesday ordered status quo while hearing the enforcement application filed by Amazon. The online retail giant is seeking implementation of the Oct. 25, 2020 order of the emergency arbitrator that put the deal between Future Retail and Reliance Retail on hold.
But the deal was approved by the Competition Commission of India and the Securities and Exchange Board of India. On Thursday, Amazon questioned the approvals.
Senior Advocate Gopal Subramanium, representing Amazon, argued that there was no reason which could justify vacating the status quo as it was ordered only till the single-judge bench pronounces the interim order with reasons on their applications.
The regulatory approvals should be rendered ineffective because they have been obtained in violation of the arbitrator's order. "Should a court not protect its orders," Subramanium said.
Not a single application has been filed seeking to vacate the order, he said. Citing Section 17 of the Arbitration and Conciliation Act, he argued that the arbitrator’s order was equivalent to an order of a court. And the order of the emergency arbitrator till date has not been superseded, said Subramanium.
Another single-judge bench judgment in December 2020 had not set aside the sanctity of the emergency arbitrator’s order and, therefore, it cannot be said to be incapable of enforcement, he said. "Can anybody style the order of the court as a nullity?"
The Delhi High Court division bench of Chief Justice DN Patel and Justice Jyoti Singh will continue to hear arguments on Friday.