When the porceedings before NCLT would be completed with in 8 months as it reached to 8 th stage out of 15 stages and when nothing would happen to the enforcement of emergency arbitrator award and to avoid delay and to avoid day to day heavy expenditure and to avoid harm to lives of 22,000/- employees - Apex court directed to complete the proceedings by continuing the same.
Emergency Arbitrator, by order dated 25.10.2020, injunctedFRL from taking any steps to materialize the deal, including injunction against proceedings before various Regulatory authorities. However, by order dated 21.12.2020, Delhi HighCourt came to a conclusion that Regulatory authorities had to pass appropriate orders considering the representation of both FRL and Amazon, before granting approvals.
In the meanwhile, CCI and SEBI approved the Scheme following the filing of the FRL suit. Further, FRL filed sanction of the composite Scheme of Arrangement under the 2 provisions of Section 230 to 232 of the Companies Act, 2013 before National Company Law Tribunal (NCLT) for its consideration on 26.01.2021, which is pending
Amazon filed a Petition for enforcement of Emergency Arbitrator award before the Delhi High Court on 25.01.2021 in OMP (ENF) (COMM.) No.17 of 2021. Vide orders dated 02.02.2021 and 18.03.2021, Delhi High Court passed orders inter alia, enforcing the emergency award.
held that In this context, if an order is passed, by the Arbitral Tribunal, in favour of FRL, then it will be difficult toinitiate fresh proceedings before NCLT at that stage. It is his submission that FRL is incurring expenditure everyday and there is an imminent threat of insolvency. Any delay in theproceedings before the NCLT will have serious ramifications and virtually render the agreement between FRLReliance group redundant. Furthermore, the livelihood of 22,000 employees of FRL are also at stake. In the same breath, he has submitted that continuation of the NCLT proceedings will not adversely affect Amazon in any manner.
16. In view of the above submissions, we grant liberty to FRL toapproach the High Court by filing an application seeking continuation of the NCLT proceedings beyond the 8th Stage (Meeting of Shareholders and creditors).
Accordingly, we request the learned Single Judge of the Delhi High Court, to consider all the contentions raised by both the parties in this regard and pass appropriate order as to continuation of the NCLT proceedings beyond the stage mentioned at serial 11 no. 8 and other regulatory approvals expeditiously, uninfluenced by any observations made herein
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 859860 OF 2022
FUTURE COUPONS PRIVATE LIMITED … APPELLANTS
& ORS.
Versus
AMAZON.COM NV INVESTMENT … RESPONDENTS
HOLDINGS LLC & ORS.
WITH
CIVIL APPEAL NOS. 861862 OF 2022
CIVIL APPEAL NO. 864 OF 2022
CIVIL APPEAL NO. 863 OF 2022
O R D E R
1. Before we deal with the issue at hand, it may be necessary
to recount brief facts. Aggrieved by the sale transaction
between Future Retail Limited (FRL)Reliance Group,
Amazon initiated an arbitration proceeding before the
1
REPORTABLE
Singapore International Arbitration Center (SIAC), in terms
of Future Coupons Pvt. Ltd. (FCPL)Amazon agreements.
2. Amazon filed an application for emergency relief with the
registrar of the SIAC court of arbitration seeking interim
prohibitory injunction to prevent FRL and FCPL from taking
further steps in the aforesaid transaction with the Reliance
group. Parallelly, FRL filed a suit before the Delhi High
Court in CS(COMM) No. 493 of 2020, against amazon for
tortious interference in the scheme for the sale of assets.
3. Emergency Arbitrator, by order dated 25.10.2020, injuncted
FRL from taking any steps to materialize the deal, including
injunction against proceedings before various Regulatory
authorities. However, by order dated 21.12.2020, Delhi High
Court came to a conclusion that Regulatory authorities had
to pass appropriate orders considering the representation of
both FRL and Amazon, before granting approvals.
4. In the meanwhile, CCI and SEBI approved the Scheme
following the filing of the FRL suit. Further, FRL filed
sanction of the composite Scheme of Arrangement under the
2
provisions of Section 230 to 232 of the Companies Act, 2013
before National Company Law Tribunal (NCLT) for its
consideration on 26.01.2021, which is pending.
5. Amazon filed a Petition for enforcement of Emergency
Arbitrator award before the Delhi High Court on 25.01.2021
in OMP (ENF) (COMM.) No.17 of 2021. Vide orders dated
02.02.2021 and 18.03.2021, Delhi High Court passed
orders inter alia, enforcing the emergency award.
6. When the matter was carried by Amazon to this Court in
SLP (C) No. 285657 of 2021, vide order dated 22.02.2021,
this Court allowed the NCLT proceedings to continue
without culminating in a final order of Sanction of Scheme.
7. However, as noted earlier, this Court by final order dated
06.08.2021, did not adjudicate the merits of the case and
limited its reasoning only to answering the legal questions
concerning the maintainability of a first appeal against an
order of the learned Single Judge in an enforcement
proceeding.
3
8. Aggrieved by the merits of the orders of the learned Single
Judge dated 02.02.2021 and 18.03.2021, FCPL and FRL
filed appeals directly before this Court in SLP (C) No. 13547
48 of 2021 and SLP (C) No. 1355657 of 2021 respectively.
This court by interim order dated 09.09.2021, passed the
following order:
“Heard learned senior counsel for the
parties at length and carefully perused the
material placed on record.
Issue notice.
Taking into consideration the
submissions advanced by the learned senior
counsel for the parties and particularly the
fact that the parties have approached the
Singapore International Arbitration Centre
for vacating the Emergency Award passed
by the Emergency Arbitrator and the
arguments in the said matter have been
concluded and the order is going to be
pronounced shortly, we think it fit to balance
the interest of both the parties by staying all
further proceedings before the Delhi High
Court for the time being. Ordered accordingly.
We further direct to all the authorities i.e.
NCLT, CCI and SEBI not to pass any final
order for a period of four weeks from today.
This order has been passed with the
consent of both the parties.
List these matters after four weeks.”
(Emphasis supplied)
4
9. Thereafter, the applications filed by FRL and FCPL for
vacating the award of the Emergency Arbitrator was
dismissed by the Arbitral Tribunal by order dated
21.10.2021. The aforesaid order of the Arbitral Tribunal,
rejecting the vacate application, was challenged by FCPL
and FRL before the Delhi High Court in Arb. Pet. No. 63 of
2021 and Arb. Pet. No. 64 of 2021. The Delhi High Court,
while issuing notice in both the matters by orders dated
29.10.2021, rejected immediate relief to FRL. Aggrieved by
the aforesaid orders, FCPL and FRL have approached this
Court in SLP (C) Nos. 18089 and 18080 of 2021
respectively.
10. This Court by a detailed order dated 01.02.2022, passed the
following order in SLP (C) Nos. 1354713548, 1355613557,
18089 and 18080 of 2021 :
“Leave granted.
..…….
“I. Setting aside of impugned orders
dated 02.02.2021 (1st impugned Order)
and 18.03.2021 (2nd impugned order) in
OMP (ENF)(Comm.) No. 17 of 2021.
5
II. Setting aside of 3rd impugned order
dated 29.10.2021 in Arb. A. (Comm.) No.
64 and 63 of 2021. The learned Single
Judge shall reconsider the issues and
pass appropriate orders on its own
merits, uninfluenced by any observation
made herein.”
At the time of the arguments of these
matters, learned Senior Counsel for
the appellants argued vehemently for
continuation of proceedings before
the NCLT during the pendency of the
above remanded matters. After
reserving these matters, W.P. (C) No.
48 of 2022 was filed by Future Retail
Limited and mentioned before this
Bench on 27.01.2022. We are of the
opinion that the facts pleaded and
arguments raised in the writ petition
may have a bearing on the abovementioned relief. We, therefore,
consider it apposite to defer our
orders in this context. We will
consider this relief at the time of
hearing of aforesaid writ petition.
Post these matters along with W.P. (C)
No. 48 of 2022.
After the pronouncement of this
judgment, learned Senior Counsel for
the appellant, Mr. Harish Salve
sought posting of all these matters
before one Bench. In view of the
prayer made, we request the Chief
Justice of Delhi High Court to post all
these matters before one Bench.”
6
11. On 03.02.2022, when the matter was taken along with W.P.
(C) 48 of 2022, learned Senior Counsel, Mr. Harish Salve
appearing for the petitioners submits that the NCLT
proceedings for grant of final approval of the proposed
Scheme ought to continue as the culmination in the final
order would take six to eight months for completing all the
steps as required under the Companies Act, 2013. He took
us through the written submissions filed on 09.01.2022,
wherein the following stages were listed:
S.No. Process
1 Pronouncement of Order by NCLT,
Mumbai bench
2 Receipt of admission stage order from
NCLT
3 Dispatch of Notice/ addendum to
Notice
4 Advertisement of Notice in Newspaper
in Form CAA2 (not less than 30 days
before the date of meeting)
5 Notice u/s. 230(5) to the regulatory
authorities
6 Filing of requisite documents with
ROC, RD and OL
7
7 Affidavit to be filed not less than 7
days before the scheduled date of
meetings
8 Meetings of Shareholders and
Creditors
1. First date of the Meetings
2. Last date of Meetings
9 Chairman report in Form CAA.4 to be
filed with NCLT
10 Filing of Petition with NCLT in Form
CAA.5 within 7 days of Chairman
Report
11 Admission of Petition and
determination of date of final hearing
by NCLT
12 Advertisement in newspaper of final
hearing of petition (not less than 10
days before the final hearing)
13 Notice of final hearing also to be given
to the regulators/ objectors from
whom the representation is received
14 Filing of Affidavit confirming service of
notice, publication of advertisement
(at least 3 days before the hearing)
15 Final hearing of petition by NCLT for
approval of the scheme
16 After hearing, passing of final order
sanctioning the scheme
8
Mr. Salve stated that it would take six to eight months for
completing all the fifteen steps set out above. He finally
submitted that it is only when the final Scheme is
sanctioned by the NCLT that the retail assets of FRL would
get alienated. So long as the final order of sanctioning is not
passed by the NCLT, Amazon is not prejudiced in any
manner.
12. Mr. Mukul Rohatgi, learned Senior Counsel appearing on
behalf of FCPL has submitted that the Competition
Commission of India has revoked initial AmazonFCPL share
purchase, which effectively nullifies the arbitration. He
submits that these facts have bearing on the continuation of
the proceedings which needs to form a part of consideration.
Accordingly, he submits that he is willing to argue on the
aforesaid consideration before the High Court in remand.
13. On the contrary, Mr. Gopal Subramanium, learned Senior
Counsel appearing for Amazon submitted that up till now
FRL has conducted NCLT proceedings in contravention of
the order of the Emergency Arbitrator as well as the
Enforcement order passed by the learned Single Judge of
9
Delhi High Court in OMP (ENF) (Comm) No. 17 of 2021. He
stated that the order of this Court dated 01.02.2022 has
clearly remanded the matter for reconsideration by the High
Court. If this Court were to grant any adinterim relief, then
this Court would be binding the High Court as to the
possible view to be taken thereafter.
14. Mr. Aspi Chinoy, learned Senior Counsel appearing for the
Amazon submits that FRL and FCPL are not entitled for any
interim relief as they have not challenged the initial order of
the Emergency Arbitrator, which is binding on them. Lastly,
Mr. Ranjit Kumar, learned Senior counsel appearing for the
Amazon, submits that FRL has already undertaken to
complete eight out of the fifteen steps listed above.
15. The aforesaid submission, is also accepted by Mr. Harish
Salve, learned Senior Counsel appearing for FRL, that the
proceedings before the NCLT have reached the stage listed
at serial no. 8 (Meeting of the shareholders and creditors) as
indicated in the abovementioned chart. He further
contended that it would take 68 months to complete the
entire process and for actual sanctioning of the Scheme by
10
the NCLT. In this context, if an order is passed, by the
Arbitral Tribunal, in favour of FRL, then it will be difficult to
initiate fresh proceedings before NCLT at that stage. It is his
submission that FRL is incurring expenditure everyday and
there is an imminent threat of insolvency. Any delay in the
proceedings before the NCLT will have serious ramifications
and virtually render the agreement between FRLReliance
group redundant. Furthermore, the livelihood of 22,000
employees of FRL are also at stake. In the same breath, he
has submitted that continuation of the NCLT proceedings
will not adversely affect Amazon in any manner.
16. In view of the above submissions, we grant liberty to FRL to
approach the High Court by filing an application seeking
continuation of the NCLT proceedings beyond the 8th Stage
(Meeting of Shareholders and creditors). Accordingly, we
request the learned Single Judge of the Delhi High Court, to
consider all the contentions raised by both the parties in
this regard and pass appropriate order as to continuation of
the NCLT proceedings beyond the stage mentioned at serial
11
no. 8 and other regulatory approvals expeditiously,
uninfluenced by any observations made herein.
17. Civil Appeals are disposed of in terms of the aforesaid order.
..........................CJI.
(N. V. RAMANA)
…..........................J.
(A.S. BOPANNA)
............................J.
(HIMA KOHLI)
NEW DELHI;
FEBRUARY 15, 2022
12
