Kishore Biyani’s Future Retail Ltd got a reprieve on Monday when the Delhi High Court overturned a previous order and lifted the status quo that was imposed on the $3.4 billion sale of retail assets to Reliance Industries Ltd following Amazon’s plea earlier this month. This is a huge blow to the Us e-commerce giant, which has tried hard to block the sale.
A two-judge bench of Chief Justice DN Patel and Justice Jyoti Singh said that Amazon had prima facie (at first sight) no reason to stall the deal and that the regulatory authorities were free to discharge their duties. This comes nearly a week later after the Delhi High Court had ruled in favor of Amazon and put the deal of the sale of Future Group’s retail, wholesale, logistics and warehousing assets to Reliance Industries on hold.
This decision is a much-needed reprieve for Future Group, which is dependent on this deal with the Mukesh Ambani-led Reliance to prevent going bankrupt.
Future Retail said in a stock exchange filing, “A division bench has stayed the operation and effect of order passed by the Ld. Single Judge, inter alia, for the prima facie reason that the company is not a party to the shareholders’ agreement dated 22 August 2019 executed between Amazon, Future Coupons Pvt. Ltd (FCPL) and the promoters of FRL (Future Retail Ltd), under which arbitration was initiated by Amazon in Singapore.”
Both Amazon and Reliance are at each other’s throats competing for the coveted domination of the Indian market, the value of which is estimated to reach $1.3 trillion by 2025.
Earlier, Future Retail was told to maintain status quo on the sale of its assets until the reserved order was given. Amazon’s plea had also resulted in regulatory authorities such as the Security and Exchange Board of India (SEBI) and the National Company Law Tribunal (NCLT) to continue to maintain status quo on the deal.
The high court on Monday said, “Prima facie, there was no reason (for Amazon) to seek a status quo order from the single judge. Statutory authorities can’t be restrained from proceeding in accordance with law. These contentious issues (emergency award enforcement) will be decided after the order is pronounced by the single judge (who had passed the interim order on 2 February).” It added that it will hear the matter again on February 26. “We hereby stay the implementation and execution of the order passed by the single judge till the next date of hearing,” the two-judge bench said.
On Monday, the high court recognized that Future Retail was not a party to the agreement Amazon and Future Coupons Pvt. Ltd.