Delhi HC directs Future Retail Ltd to maintain status quo in its deal with Reliance, grants interim relief to Amazon

The Delhi High Court on Tuesday directed Future Retail Limited to maintain status quo with respect to its deal with Reliance while granting interim relief to Amazon.

A single-judge bench of Justice JR Midha said the court is satisfied that immediate orders are necessary to protect the rights of the petitioner till the pronouncement of the reserved order.

"In that view of the matter, the respondents are directed to maintain status quo as on today at 4.50 pm till the pronouncement of the reserved order," he said.

The court was hearing a plea by Amazon in which it said the respondents including Future Coupons Private Limited "have deliberately and willfully violated and are continuing further with the violation" of the order of October 25, 2020, of the Emergency Arbitrator.

The petitioner has sought an immediate interim order to protect its rights till the pronouncement of the reserved order.

The respondents are objecting to the enforcement of the order passed by the Emergency Arbitrator on various grounds stating that "the Emergency Arbitrator is not an Arbitrator/ Arbitral Tribunal; the order dated October 25, 2020, is not an order under Section 17( 1) and is not enforceable under Section 17(2) of the Arbitration and Conciliation Act, the respondent is not a party to the arbitration agreement and the order dated October 25, 2020, is a nullity".

The court, however, said that it is of prima facie view that the "Emergency Arbitrator is an Arbitrator; the Emergency Arbitrator has rightly proceeded against the respondent; the order dated October 25, 2020, is not a nullity; the order dated October 25, 2020, is an order under Section 17(1) of the Arbitration and Conciliation Act."

"This Court is of the view that the order of October 25, 2020, is appealable under Section 37 of the Arbitration and Conciliation Act. This Court is of the clear view that the order dated October 25, 2020, is enforceable as an order of this Court under Section 17(2) of the Arbitration and Conciliation Act. The detailed reasons shall be given in the reserved order," the order said.

It directed the respondent to file an affidavit to place on record the actions taken by them after October 25 last year and the present status of all those actions within 10 days.

The court said that the other prayers of the petitioner shall be considered in the reserved order.

The Future Group announced the sale of its retail and wholesale business to Reliance Retail in a Rs 24,713 crore deal on August 29 last year.

It announced plans to merge key group compes, including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks into FEL.

Amazon had argued that a 2019 pact it signed with Future prevented the Indian company from selling its retail assets to certain parties. Amazon had taken Future Retail into an emergency arbitration over alleged violation of the contract.

( With inputs from ANI )