BENGALURU: The Supreme Court on Monday halted the regulatory approval process for the Rs 24,713 crore ($3.4 billion) Future-Reliance Industries deal after US e-commerce giant Amazon filed a plea before the top court on February 11.
Amazon had approached the SC appealing a recent Delhi High Court decision that had lifted the earlier status quo order on the deal.
On Monday, the apex court directed the National Companies law tribunal (NCLT) to not give the final approval to the Future-RIL deal till further orders.
The SC added that while the proceedings at NCLT can go on, they will not culminate into any order on the amalgamation of FRL with Reliance. The two member SC bench also issued notices to Kishore Biyani and Future Group seeking their responses within three weeks. The SC will hear the parties after five weeks.
The ruling by India’s top court has given an important edge to the US retailer which had approached the Delhi High Court seeking the enforcement of a an arbitration award by a Singapore-based international tribunal. Biyani’s Future Group had also knocked at the doors of the Delhi High Court, appealing against the court’s decision to maintain a status-quo on the deal.
On February 8, however, a wider bench of the Delhi High Court had lifted the status-quo on the mega deal and refused to accede to Amazon’s request to keep the order in abeyance for a week so that alternate measures could be explored.
The legal tussle between Amazon and the Future group has added further stress on the latter and put the survival of Biyani’s retail enterprise at stake, with debt levels reaching as high as $ 2.5 billion.
Amazon, in its plea, has contended that in addition to Future receiving Rs 1,450 crore in exchange for a 49 per cent stake in one of the promoter entities, Future Coupons also received Rs 500 crore from the US firm to save its retail company.
However, Future Retail has charged Amazon with demanding $40 million from the Biyanis in order to drop its right of first refusal.
Amazon has told the court that it entered into an agreement with Future group on the condition that the latter will not sell its retail business to a rival company such as Reliance Industries.