The Delhi High Court has granted time to Future Retail, Reliance Retail and other respondents to file their response to a plea by Amazon. The global e-commcerce giant appeal is against the order in Future Retail’s suit in relation to its deal with Reliance Retail.
Senior Advocate Gopal Subramanium, appearing for Amazon, submitted that after the single judge concluded in favor of the validity of the Emergency Award, the suit filed by FRL could not have been held to be maintainable. He said that FRL was heard by the Emergency Arbitrator (EA) who came to the conclusion it was a necessary and proper party to the arbitration proceedings.
In its appeal, the e-commerce giant contended that the single judge passed the impugned order on December 21, 2020, refusing to grant any interim relief to FRL. It said the single judge further correctly upheld the validity of the EA. However, having held that the EA order was valid and after noting that the merits of the EA were not being challenged, the single judge made certain prima-facie observations, which were inconsistent with the findings contained in the EA order. In the appeal, the global online retailer said the prima-facie observations contained in the impugned order effectively resulted in allowing FRL to collaterally bypass the EA.
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Narasimhan K, senior advocate Madras High Court, said that since Amazon’s appeal has been accepted by the Honorable High Court of Delhi and moreover, the only order on this issue has been passed by EA from SIAC and upheld by high court, SEBI is obligated to wait for the Tribunal to arrive at a conclusion before passing a ruling.
He had earlier written that the move to carry out the sale of the entire undertaking of FRL through a series of interconnected transactions involving related parties will set a dangerous precedent and could pave the way for many more wrong transactions that could hurt public interests. “Companies wanting to bypass SEBI Regulations, 2011 (Takeover Regulations) by selling assets to a related party at a non-transparent price and not allowing exit to public shareholders, is the greatest misdeed towards the public and is an attempt to take undue advantage of the law.”
