The lawyer for Future Retail Limited (FRL) told the Delhi High Court on Thursday that due to Reliance’s investment, Future’s creditors worth Rs 18 billion are being protected. The lawyer maintained that they are all Indians and claimed that Amazon does not care.
The Delhi High Court is hearing Future Retail’s lawsuit related to its settlement with Reliance. He was recently detained by an Emergency Arbitrator of the Singapore International Arbitration Center (SIAC) on behalf of Amazon. Lawyers for the companies have been arguing since last week. The matter was heard by Judge Mukta Gupta. The court postponed the hearing until Friday, according to information available on the Bar & Bench legal platform.
Future Retail, which was represented by lead attorney Harish Salve, told the court that Future Retail does not need to request permission from Amazon to make any investment as it has no rights. He said Amazon only invested in Future Coupons, a Future Retail developer company.
“(If his argument is accepted) the degree of control of Amazon will be enormous … an American company with less than 10 percent,” Salve said, according to Bar & Bench. “May I have the right to tell you who I can do business with? … (Reliance wants to buy, but) I’m sorry, I have to ask Big Brother sitting in America.”
In August, Future Group closed an asset sale agreement for Rs 24,713 million with Reliance Industries Ltd (RIL). Amazon then sent a legal notice to Future, claiming that the retailer’s deal violated an agreement with the American e-commerce giant. This was because last year Amazon had bought a 49 percent stake in one of Future’s unlisted companies, Future Coupons Pvt Ltd (FCPL) for Rs 1,430 crore.
ALSO READ: Reliance Retail Completes Fundraising of Rs 47,265 cr for sale of 10% stake
“They (Amazon) say where the deal with Reliance is,” Salve said. “The whole business is being taken over and paid for … if this is all in agreement, doesn’t it seem to suggest that there is no deal with Reliance?”
Salve argued that by seeking to be informed of all investments, Amazon is not asserting its investor protection rights, but is trying to gain indirect control over the retailer.
“When you have a passive investment of less than 10 percent, you can’t turn it into an active investment. It is not protection for investors, ”said Salve.
He argued that FRL is a publicly traded company and Amazon cannot object. He argued that due to the Reliance deal, Future creditors worth Rs 18 billion are being protected.
“These are all Indians … Amazon doesn’t care. The Indians will solve their own problems. Why would (Amazon) say that I would not do business, ”said Salve.
He said that if the Reliance-Future transaction goes through, Reliance will enter the market.
“Reliance may not be as big as Amazon, but it is a powerful company in India. What prevents Reliance from entering the online marketplace. Then it will be Amazon vs Reliance, ”Salve said.
Lead counsel Darius Khambata, who made presentations on behalf of FRL, referred to the letter addressed to the Securities and Exchange Board of India (SEBI) written by Amazon. The letter sought to consider the provisional ruling by a Singaporean arbitration court prohibiting the sale of assets of the Future group to Reliance Retail.
“They say it is a binding order and not an opinion. Therefore, it will also bind the regulator ”, Khambata. “This is an illegal interference with my business and my contractual rights,” he said.
He argued that the emergency arbitrator has no legal status and that it was unfair for Amazon to drag in a statutory authority.
“We say that Amazon is claiming that it has control over FRL by a single integrated transaction, but did not tell the regulator,” Khambata said, referring to the letter sent by Future to SEBI.
Dear reader,
Business Standard has always endeavored to provide up-to-date information and feedback on developments that are of interest to you and that have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our determination and commitment to these ideals. Even during these difficult times arising from Covid-19, we remain committed to keeping you informed and up-to-date with credible news, authoritative opinions, and incisive commentary on relevant current affairs.
However, we have a request.
As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you more quality content. Our subscription model has received an encouraging response from many of you, who have subscribed to our content online. Increased subscription to our online content can only help us achieve our goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital editor
.
