Amazon and Future-Twister

The Court duel involving two of the world’s most extravagant men opposing each on worn-out retail chain, can only feel justified because of the inheritance of the retail sector.

Brace yourselves with more than five months of petitions, hearings and see-sawing of interval ranges and multiple Indian forums, our e-commerce saviour Amazon, has acquired potentially conclusive triumph.

Future Retail, on the brink of bankruptcy, hoped to be bailed out by Reliance right at the back of the investment received from Amazon in Future Coupons. The crack Future Group was proposing to leverage was, Amazon did not invest in Future Retail and Amazon openly claimed that the investment was in the Future group.

Fear of assets soon turning to NPPAs had Future Group, scurry. But rarely can you have your cake and eat it too!

On March 18, 2021 the Delhi High Court upheld the Singapore International Arbitration Centre’s (SIAC) decision from October, 2020, in staying Reliance Retail’s acquisition of Future Retail, in an outcome of the arbitration processing initiated by Amazon starting in Singapore.

Delhi HC order of March 2021  

The Delhi HC upheld SIAC’s earlier order and directed its enforcement. The DHC found Future Group’s objections to the SIAC decision – “frivolous”,  to say the least and also found it a fit occasion to order Future to pay INR 20 lakh as a penalty to PM  Relief Fund towards COVID 19 vaccination for people below the poverty line.

Violating orders are not something, judges feel sympathetic about, and the DHC issued a show-cause notice asking why Mr. Biyani and other promoters should not be detained in civil prison for violation of the SIAC’s emergency award., to which Mr. Biyani responded with an appeal,  and obtained a stay from the Division Bench of DHC against the single bench order of March 18, 2021.

A wait of a month to April 28, 2021.

Supreme Court verdict to soon put an end to month-long tussle

In Feb 2021, a different bench of the Delhi HC had allowed the Reliance-Future deal, which Amazon interpreted to be “illegal” and “arbitrary” and approached the Supreme Court against that decision.

Late in February, the apex court stayed that order allowing the deal and instructed the NCLT to proceed with hearing on the deal but not to conclude on orders. Taking up to a year for arbitration proceedings to conclude, one can still consider it to be a quick closure.

However, this is unlikely to make the creditors being compassionate towards legitimate their claims.

The impact on Competition

Amazon’s legal pursuit against Future Group is going to determine the degree of Amazon/ Reliance competition in retail in India

Future RetailReliance Retail
• India’s second-largest retail chain
• more than 1500 stores spanning 437 Indian cities,
• Big Bazaar, Fashion Big Bazaar, HomeTown, Food Bazaar, and Food Hall
• Big Bazaar reportedly contributes about 80% to Future Retail’s revenue.
• Largest Retail chain in India;
• Reliance Retail operates in nearly 12K stores across 6,600 towns and cities.
• Owner of JioMart

If Reliance Retail acquires Future’s retail business, it would become the de facto leader of India’s estimated $1 Trillion consumer retail market, a position Amazon rightly should not be willing to concede to.

Chronology of case in public domain

October 05-13, 2020Emergency Arbitration NV Investment HoldingsSingapore International Arbitration Centre initiates arbitration proceedings against Future Coupons and other entities in the proposed combination under SIAC rules, opposing the transaction with Reliance Industries Group.
October 25, 20202Emergency Arbitrator’s Interim OutcomeEmergency Arbitrator passes an Interim Order in favour of Amazon directing the Future Group to not proceed with the deal with Reliance.
November 10, 2020Civil Suit Comm 493/2020 in DHCFuture RetailDelhi High Court: Hon. Justice Mukta Gupta Future Retails challenges the validity of the EA order under SIAC on Jurisdiction issue, validity and other facts of the same order.
November 11, 19, 20, 2020Civil Suit Comm 493/ 2020 in DHCFuture Retail OutcomeDelhi High Court: Hon. Justice Mukta Gupta Court directs filling of reply affidavits as Amazon accepts summons; Both parties conclude their respective arguments; Judgement reserved.
November 21, 2020Civil Suit Comm 493/ 2020 in DHCFuture Retail OutcomeDelhi High Court: Hon. Justice Mukta Gupta Court declines interim injunction against the EA award, makes a prima facie judgement on certain facts.
January 13, 2021Civil Suit Comm 493/ 2020 in DHCFuture RetailDelhi High court: Hon. J. Jayant Nath Matter is adjourned to April 06, 2021
January 13, 2021FAO(OS) (COMM) 7/2021 in NV Investment Holdings LLCDelhi High Court: Hon. Jyoti Singh J. Amazon challenges parts of the order in CS Comm 493/2020; Further in this- Coram was not available. [?]
January 28, 2021O.M.P ENF(Comm) 17/2021 in DHCAmazon.comDelhi High Court: Hon. J.R Midha J. Amazon went under Sec. 17(2) of the Arbitration and Conciliation Act and Order 34 Rule 2A of the CPC, seeking enforcement of EA Order after the order is CS 493/2020
January 29, 2021O.M.P ENF(Comm) 17/2021 in DHCAmazon.comDelhi High Court: Hon. J.R Midha J. Notice was served to both the parties, Submission of brief note and factual aspects to be performed by both parties
February 01, 2021O.M.P ENF(Comm) 17/2021 in DHCAmazon.comDelhi High Court: Hon. J.R Midha J. Amazon files supplementary responses, case was listed for rejoinder and other orders for Feb 02, 2021.
February 02, 2021O.M.P ENF(Comm) 17/2021 in DHCAmazon.comDelhi High Court: Hon. J.R Midha J. The court observed there was wilful disobedience by the Future Group entities and an interim order is required to save guard the interest of Amazon. Court ordered a Status Quo on any steps taken in furtherance to Board resolution and disputed deal.
February 04, 2021FAO (OS) (COMM) 21/2021 in DHCFuture RetailDelhi HC Division Bench: Hon. Chief Justice, Hon. Jyoti Singh J. Future Retail challenged the Status Quo order passed by the bench of Hon. J. R Midha J. in O.M.P ENF (Comm) 17/2021
February 08, 2021FAO (OS) (COMM) 21/2021 in DHCFuture RetailDHC Division Bench held a stay on the Status Quo order, thereby allowing regulators and NCLT to proceed.
 February 16, 2021FAO (OS) (COMM) 21/2021 in DHCFuture RetailDHC Division Bench adjourns the matter as Amazon moves Supreme Court against the order
February 22, 2021SLP No. 2856/57 of 2021 in SCAmazon.comSupreme Court Hon. J. Rohinton Fali Nariman, Hon. J. B.R Gavai Amazon challenges the stay on Status Quo order by the DHC Division Bench. The court allows NCLT to proceed with the case filed by Future Group SC does not give NCLT the right to culminate a final order.
February, 2021 (No Specific date)Company Petition u/s 230-232 of the Companies Act, 2013 in NCLTFuture RetailMumbai NCLT Future Group entities move Mumbai NCLT to seek approval for holding Shareholder meeting as proceed with the group entity deal- to consolidate. Amazon objections on this move, NCLT reserves the order.
March 18, 2021O.M.P ENF (Comm) 17/2021 in   Appealed against the Feb 2, 2021 OrderDelhi High Court: Hon, J. R Midha J. DHC upholds the EA Order & the application to the doctrine of Group of companies, Directs – Attachment of Future-Biyani’s assets, imposed costs of Rs. 20 lakhs. Thereby passed an order in furtherance of the Enforcement application filed by Directs respondents to be present on the next date of hearing.
March 20, 2021Petition filed against O.M.P ENF (Comm) 17/2021Future RetailDHC Division Bench: Hon. Chief Justice DN Patel and Hon. J. Jasmeet Singh In a fresh round, Future Group companies have moved the DHC in appeal against the Single Judge’s order in favour of the enforceability of the EA Order.
March 22, 2021Petition filed against O.M.P ENF (Comm) 17/2021Future Retail OutcomeDHC Division Bench: Hon. Chief Justice DN Patel and Hon. J. Jasmeet Singh DHC Division Bench stated that, Order stayed of single judge order dated March 18, 2021 till next date of hearing, April 30″

** DHC Division Bench ordered a stay on single judge order dated March 18, 2021 till the next date of hearing April 30, 2021 **

This blog, ‘Amazon and Future-Twister’ is only for information purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Endeavoured to accurately reflect the subject matter with legal analysis, without any representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this. This isn’t an attempt to solicit business in any manner.

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