MUMBAI: Amazon has requested the Supreme Court (SC) to pass orders restraining the opening of any new store in place of Future Retail Ltd’s (FRL) retail assets at the same premises, pending the final award from a Singapore Tribunal which affirmed the order of an emergency arbitrator (EA) that FRL cannot dispose of its stores without Amazon’s consent.
Amazon, at the direction of the SC, filed the interim application on March 15. Amazon had earlier moved the SC to vacate the stay of the Singapore Emergency Arbitrator’s order by the Delhi HC as sought by FRL. Amazon in its interim application claimed that between February and March 2021, FRL “willingly” surrendered the lease deeds in relation to the premises where it was carrying on its retail business. Thereafter, the same leases were taken over by constituents of the MDA (Mukesh Dhirubhai Ambani) Group as the new lessees.
Amazon on March 14 issued a public notice against FRL threatening it with legal action for transferring its retail assets to MDA in violation of the EA’s orders. However, FRL in a disclosure to the stock exchanges Wednesday said that its board had taken “strong objection” to Reliance Group’s “unilateral” termination of lease agreements and “takeover” of its stores.
Responding to stock exchange queries on media reports pertaining to Amazon’s public notice, FRL said the onset of the Pandemic since March 2020 and subsequent lockdowns had adversely affected its financial condition. In August of 2020 FRL had entered into a deal with RIL to sell its retail assets for Rs 24,713 crore.
FRL said that post the announcement of the scheme of arrangement with Reliance, it was unable to raise additional capital and continued to remain in default on various commitments. It detailed how Reliance group reached out to FRL’s lessors, in the interests of all stakeholders, and signed fresh lease deeds in respect of the stores with them. It then subleased the same on leave and license basis to FRL. However, the second and third Covid waves further strained FRL’s finances and it was unable to pay rent to Reliance Group.
FRL to stock exchanges
FRL in a disclosure to the stock exchanges said that its board had taken “strong objection” to Reliance Group’s “unilateral” termination of lease agreements and “takeover” of its stores.