SC restrains NCLT from passing final order on Future-Reliance merger
The Supreme Court on Monday restrained the National Company Law Tribunal (NCLT) from passing any final order on the Rs 24,713-crore merger deal between Future Retail Limited (FRL) and Reliance Retail, which has been challenged by Amazon Inc as being illegal and liable to be set aside.
A bench of Justices R.F. Nariman and B.R. Gavai while issuing notices to FRL and RIL on Amazon’s appeal directed that the National Company Law Tribunal (NCLT) can continue with its proceedings, but it cannot pass any final order on the issue until the top court decides on Amazon’s appeal.
Senior advocate Harish Salve appearing for FRL, however, told the bench that the NCLT was only seized with the issue of convening a meeting as he opposed the plea for a stay made by Amazon through senior advocate Gopal Subramanium.
“Issue notice… counter affidavit be filed within two weeks. Rejoinder affidavit, if any, be filed within one week thereafter. List after three weeks. In the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme,” the bench said in its order after briefly hearing senior advocates Harish Salve appearing for FRL and Gopal Subramanium for Amazon. The Reliance Industries scrip fell 3.50 per cent on the BSE on Monday.
The court passed the direction while dealing with the appeal filed by Amazon Inc challenging the order of February 8 given by the division bench of the Delhi high court that had stayed an earlier order of a single judge who had directed FRL and other statutory authorities to maintain status quo on its Rs 24,713-crore deal with Reliance Retail.
The single judge had directed status quo to an Amazon plea which had sought implementation of the award passed by the Emergency Arbitrator at the Singapore International Arbitration Centre (SIAC) restraining FRL and Mukesh Ambani-owned from going ahead with the merger.
“The order (division bench) seems to have decided the appeal final at the interim (stage)... we don’t wish to reveal anything . We are not commenting on the merits here ...,” the bench remarked.
The Jeff Bezos-led company had challenged the merger on the ground FRL had breached its earlier contract with Amazon. According to Amazon in view of its subsisting contract, the Future group cannot enter into any amalgamation process or any agreement with Reliance without its consent.
In its special leave petition against the division bench order, Amazon had contended that the order was passed “hastily” and was “unsustainable in law” as the order was passed without even waiting for the single judge’s order of February 2.
RIL share falls
The development had an adverse impact on the Reliance Industries share price which fell Rs 73.15 or 3.52 per cent to close at Rs 2,007.40 on the BSE. The scrip slipped below the Rs 2000 level to hit a low of Rs 1,995.10 in intra-day trade. Future group counters also came under pressure. Market circles said that the shares were likely to move in tune with developments in the top court.