Future Coupons Private Limited vs Amazon.Com Nv Investment Holdings Llc

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 859­860 OF 2022

FUTURE COUPONS PRIVATE LIMITED … APPELLANTS & ORS.

Versus

AMAZON.COM NV INVESTMENT … RESPONDENTS HOLDINGS LLC & ORS.

WITH

CIVIL APPEAL NOS. 861­862 OF 2022

CIVIL APPEAL NO. 864 OF 2022

CIVIL APPEAL NO. 863 OF 2022

ORDER

1. Before we deal with the issue at hand, it may be necessary

to recount brief facts. Aggrieved by the sale transaction

Signature Not Verified between Future Retail Limited (FRL)­Reliance Group, Digitally signed by SATISH KUMAR YADAV Date: 2022.02.15

Amazon initiated an arbitration proceeding before the 15:26:44 IST Reason:

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Singapore International Arbitration Center (SIAC), in terms

of Future Coupons Pvt. Ltd. (FCPL)­Amazon agreements.

2. Amazon filed an application for emergency relief with the

registrar of the SIAC court of arbitration seeking interim

prohibitory injunction to prevent FRL and FCPL from taking

further steps in the aforesaid transaction with the Reliance

group. Parallelly, FRL filed a suit before the Delhi High

Court in CS(COMM) No. 493 of 2020, against amazon for

tortious interference in the scheme for the sale of assets.

3. Emergency Arbitrator, by order dated 25.10.2020, injuncted

FRL from taking any steps to materialize the deal, including

injunction against proceedings before various Regulatory

authorities. However, by order dated 21.12.2020, Delhi High

Court came to a conclusion that Regulatory authorities had

to pass appropriate orders considering the representation of

both FRL and Amazon, before granting approvals.

4. In the meanwhile, CCI and SEBI approved the Scheme

following the filing of the FRL suit. Further, FRL filed

sanction of the composite Scheme of Arrangement under the

2 provisions of Section 230 to 232 of the Companies Act, 2013

before National Company Law Tribunal (NCLT) for its

consideration on 26.01.2021, which is pending.

5. Amazon filed a Petition for enforcement of Emergency

Arbitrator award before the Delhi High Court on 25.01.2021

in OMP (ENF) (COMM.) No.17 of 2021. Vide orders dated

02.02.2021 and 18.03.2021, Delhi High Court passed

orders inter alia, enforcing the emergency award.

6. When the matter was carried by Amazon to this Court in

SLP (C) No. 2856­57 of 2021, vide order dated 22.02.2021,

this Court allowed the NCLT proceedings to continue

without culminating in a final order of Sanction of Scheme.

7. However, as noted earlier, this Court by final order dated

06.08.2021, did not adjudicate the merits of the case and

limited its reasoning only to answering the legal questions

concerning the maintainability of a first appeal against an

order of the learned Single Judge in an enforcement

proceeding.

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8. Aggrieved by the merits of the orders of the learned Single

Judge dated 02.02.2021 and 18.03.2021, FCPL and FRL

filed appeals directly before this Court in SLP (C) No. 13547­

48 of 2021 and SLP (C) No. 13556­57 of 2021 respectively.

This court by interim order dated 09.09.2021, passed the

following order:

“Heard learned senior counsel for the parties at length and carefully perused the material placed on record.

Issue notice.

Taking into consideration the submissions advanced by the learned senior counsel for the parties and particularly the fact that the parties have approached the Singapore International Arbitration Centre for vacating the Emergency Award passed by the Emergency Arbitrator and the arguments in the said matter have been concluded and the order is going to be pronounced shortly, we think it fit to balance the interest of both the parties by staying all further proceedings before the Delhi High Court for the time being. Ordered accordingly. We further direct to all the authorities i.e. NCLT, CCI and SEBI not to pass any final order for a period of four weeks from today. This order has been passed with the consent of both the parties.

List these matters after four weeks.” (Emphasis supplied)

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9. Thereafter, the applications filed by FRL and FCPL for

vacating the award of the Emergency Arbitrator was

dismissed by the Arbitral Tribunal by order dated

21.10.2021. The aforesaid order of the Arbitral Tribunal,

rejecting the vacate application, was challenged by FCPL

and FRL before the Delhi High Court in Arb. Pet. No. 63 of

2021 and Arb. Pet. No. 64 of 2021. The Delhi High Court,

while issuing notice in both the matters by orders dated

29.10.2021, rejected immediate relief to FRL. Aggrieved by

the aforesaid orders, FCPL and FRL have approached this

Court in SLP (C) Nos. 18089 and 18080 of 2021

respectively.

10. This Court by a detailed order dated 01.02.2022, passed the

following order in SLP (C) Nos. 13547­13548, 13556­13557,

18089 and 18080 of 2021 :

“Leave granted.

..…….

“I. Setting aside of impugned orders dated 02.02.2021 (1st impugned Order) and 18.03.2021 (2nd impugned order) in OMP (ENF)(Comm.) No. 17 of 2021.

5 II. Setting aside of 3rd impugned order dated 29.10.2021 in Arb. A. (Comm.) No. 64 and 63 of 2021. The learned Single Judge shall reconsider the issues and pass appropriate orders on its own merits, uninfluenced by any observation made herein.”

At the time of the arguments of these matters, learned Senior Counsel for the appellants argued vehemently for continuation of proceedings before the NCLT during the pendency of the above remanded matters. After reserving these matters, W.P. (C) No. 48 of 2022 was filed by Future Retail Limited and mentioned before this Bench on 27.01.2022. We are of the opinion that the facts pleaded and arguments raised in the writ petition may have a bearing on the above­ mentioned relief. We, therefore, consider it apposite to defer our orders in this context. We will consider this relief at the time of hearing of aforesaid writ petition.

Post these matters along with W.P. (C) No. 48 of 2022.

After the pronouncement of this judgment, learned Senior Counsel for the appellant, Mr. Harish Salve sought posting of all these matters before one Bench. In view of the prayer made, we request the Chief Justice of Delhi High Court to post all these matters before one Bench.”

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11. On 03.02.2022, when the matter was taken along with W.P.

(C) 48 of 2022, learned Senior Counsel, Mr. Harish Salve

appearing for the petitioners submits that the NCLT

proceedings for grant of final approval of the proposed

Scheme ought to continue as the culmination in the final

order would take six to eight months for completing all the

steps as required under the Companies Act, 2013. He took

us through the written submissions filed on 09.01.2022,

wherein the following stages were listed:

S.No. Process 1 Pronouncement of Order by NCLT, Mumbai bench

2 Receipt of admission stage order from NCLT

3 Dispatch of Notice/ addendum to Notice

4 Advertisement of Notice in Newspaper in Form CAA­2 (not less than 30 days before the date of meeting)

5 Notice u/s. 230(5) to the regulatory authorities

6 Filing of requisite documents with ROC, RD and OL

7 7 Affidavit to be filed not less than 7 days before the scheduled date of meetings

8 Meetings of Shareholders and Creditors 1. First date of the Meetings 2. Last date of Meetings

9 Chairman report in Form CAA.4 to be filed with NCLT

10 Filing of Petition with NCLT in Form CAA.5 within 7 days of Chairman Report

11 Admission of Petition and determination of date of final hearing by NCLT

12 Advertisement in newspaper of final hearing of petition (not less than 10 days before the final hearing)

13 Notice of final hearing also to be given to the regulators/ objectors from whom the representation is received

14 Filing of Affidavit confirming service of notice, publication of advertisement (at least 3 days before the hearing)

15 Final hearing of petition by NCLT for approval of the scheme

16 After hearing, passing of final order sanctioning the scheme

8 Mr. Salve stated that it would take six to eight months for

completing all the fifteen steps set out above. He finally

submitted that it is only when the final Scheme is

sanctioned by the NCLT that the retail assets of FRL would

get alienated. So long as the final order of sanctioning is not

passed by the NCLT, Amazon is not prejudiced in any

manner.

12. Mr. Mukul Rohatgi, learned Senior Counsel appearing on

behalf of FCPL has submitted that the Competition

Commission of India has revoked initial Amazon­FCPL share

purchase, which effectively nullifies the arbitration. He

submits that these facts have bearing on the continuation of

the proceedings which needs to form a part of consideration.

Accordingly, he submits that he is willing to argue on the

aforesaid consideration before the High Court in remand.

13. On the contrary, Mr. Gopal Subramanium, learned Senior

Counsel appearing for Amazon submitted that up till now

FRL has conducted NCLT proceedings in contravention of

the order of the Emergency Arbitrator as well as the

Enforcement order passed by the learned Single Judge of

9 Delhi High Court in OMP (ENF) (Comm) No. 17 of 2021. He

stated that the order of this Court dated 01.02.2022 has

clearly remanded the matter for reconsideration by the High

Court. If this Court were to grant any ad­interim relief, then

this Court would be binding the High Court as to the

possible view to be taken thereafter.

14. Mr. Aspi Chinoy, learned Senior Counsel appearing for the

Amazon submits that FRL and FCPL are not entitled for any

interim relief as they have not challenged the initial order of

the Emergency Arbitrator, which is binding on them. Lastly,

Mr. Ranjit Kumar, learned Senior counsel appearing for the

Amazon, submits that FRL has already undertaken to

complete eight out of the fifteen steps listed above.

15. The aforesaid submission, is also accepted by Mr. Harish

Salve, learned Senior Counsel appearing for FRL, that the

proceedings before the NCLT have reached the stage listed

at serial no. 8 (Meeting of the shareholders and creditors) as

indicated in the abovementioned chart. He further

contended that it would take 6­8 months to complete the

entire process and for actual sanctioning of the Scheme by

10 the NCLT. In this context, if an order is passed, by the

Arbitral Tribunal, in favour of FRL, then it will be difficult to

initiate fresh proceedings before NCLT at that stage. It is his

submission that FRL is incurring expenditure everyday and

there is an imminent threat of insolvency. Any delay in the

proceedings before the NCLT will have serious ramifications

and virtually render the agreement between FRL­Reliance

group redundant. Furthermore, the livelihood of 22,000

employees of FRL are also at stake. In the same breath, he

has submitted that continuation of the NCLT proceedings

will not adversely affect Amazon in any manner.

16. In view of the above submissions, we grant liberty to FRL to

approach the High Court by filing an application seeking

continuation of the NCLT proceedings beyond the 8th Stage

(Meeting of Shareholders and creditors). Accordingly, we

request the learned Single Judge of the Delhi High Court, to

consider all the contentions raised by both the parties in

this regard and pass appropriate order as to continuation of

the NCLT proceedings beyond the stage mentioned at serial

11 no. 8 and other regulatory approvals expeditiously,

uninfluenced by any observations made herein.

17. Civil Appeals are disposed of in terms of the aforesaid order.

..........................CJI.

(N. V. RAMANA)

…..........................J. (A.S. BOPANNA)

............................J. (HIMA KOHLI)

NEW DELHI;

FEBRUARY 15, 2022

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