Amazon pleads Delhi HC for FRL’s store reversal

US e-comm giant argued ‘transfer’ of 835 stores by Future Retail to RIL violated Singapore tribunal’s injunction
Amazon(Photo | AP)
Amazon(Photo | AP)

MUMBAI: Legal troubles could increase for Future Group, despite its deal with RIL coming apart, with e-comm giant Amazon continuing to press for the enforcement of a Singapore Arbitral Tribunal order barring Future from alienating its assets. Amazon argued in the Delhi HC on Monday that the “transfer” of 835 stores by Future Retail (FRL) to RIL violated an injunction passed by the Singapore Arbitral Tribunal that barred FRL from alienating its assets pending the tribunal passing a final order.

On April 23, RIL and Future Group called off a deal signed in August 2020 involving the sale of Future’s retail, wholesale and logistics assets to the former for Rs 24,713 cr, after bankers to the retailer voted against the deal. Amazon appealed against the proposed deal in October 2020 before an emergency arbitrator in Singapore on grounds that it violated certain agreements signed between itself and promoter group company Future Coupons in 2019. The EA ruled in favour of Amazon and the Arbitral Tribunal upheld the former’s award to the e-comm giant. FRL sought a stay of arbitral proceedings first from the Delhi HC and then the SC, which referred the matter back to the Delhi HC, which is currently hearing an interim application by Amazon.

Amazon alleges Future Group and RIL colluded to enable the latter to take over FRL’s 835 stores on February 25 under the guise of non-payment of rent to it despite the two parties being aware of the injunction and before the NCLT approved the proposed scheme of transfer .

Amazon senior counsel Gopal Subramanium questioned the financial distress of FRL in March by citing its annual account submission for FY21 as late as in July 21 wherein the firm stated it was in a “comfortable financial position” and in a meeting with bankers as late as December 2021 where it reportedly stated it was in shortfall of only about Rs 250 crore in lease obligation just before its March disclosure to stock exchanges referred to its dire financial position leading to RIL taking over the stores sub leased to it.

The hearing will continue on April 28. The judge also asked if RIL was a party to the application seeking interim relief to which Amazon said not yet.

  • Amazon seeks enforcement of Arbitral order barring alienation of assets by Future
  • RIL took control of 835 Future stores in Feb after latter fails to pay rent
  • With RIL deal scrapped, bankers likely to take Future to IBC

Future reportedly owes creditors Rs 29,000 cr

Amazon can’t buy stake in FRL as FDI rules on retail bar it from same, but Its partner Samara Capital can bid for assets as can others like RIL

Rs 24,713 cr
RIL and Future Group called off a deal signed in Aug 2020 involving the sale of Future’s retail, wholesale and logistics assets to the former for Rs 24,713 cr

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