BENGALURU: India’s dethroned retail king Kishore Biyani and his debt-ridden firm Future Group suffered a major setback after the Delhi High Court upheld the Singapore emergency arbitration award which had put Rs 24,713 crore proposed Reliance-Future Deal on hold on appeal of e-commerce giant Amazon.
A single-judge bench comprising Justice JR Midha on Thursday also issued a show-cause notice to Biyani and other FRL shareholders, asking them why they should not be detained in civil prison for violation of the EA order. The Court has also directed for the attachment of assets of Biyani and other FRL shareholders. Biyani and others have been asked to submit affidavits providing additional details of their assets before the court.
Justice Midha stated that the EA order by the Singapore International Arbitration Centre(SIAC) is enforceable under Section 17(2) of the Indian Arbitration and the Conciliation Act and hit out at Biyani and other promoters of FRL for deliberately disobeying the order, who are liable to face action under code of civil procedure. The Court said that FRL had raised a vague plea seeking nullity of the EA and maintained that the Biyani’s firm was a party to the proceedings at the SIAC.
While directing the Future Group CEO, Kishore Biyani to appear in person during the next hearing in April, the Delhi HC also said that Singapore’s emergency arbitrator had rightly invoked the group of company doctrine and restrained the Future group to sell its assets to Reliance.
Biyani and FRL have now been directed to stop further action in seeking regulatory approval for the RIL-FRL deal and bring on record all the actions taken after an EA order was passed on October 25, 2020, for the furtherance of the deal. FRL had approached NCLAT for the clearance of its deal with RIL in a bid to save its retail, warehousing, and logistics business with a mounting debt of Rs 13,000 crore.
Amazon which owns a 49% stake in FRL’s promoter entity Future Coupons has argued that Biyani has violated a contract that restrained FRL from entering into any shareholding arrangement with rival companies including Reliance. The e-commerce firm said that it was seeking its right of first refusal and had also offered Rs 500 crore to Biyani to salvage his retail enterprise. Biyani, on the other hand, has charged Amazon of demanding Rs 290 crore from FRL as compensation for the FRL-RIL transaction.