Supreme Court of India
FUTURE COUPONS PRIVATE LIMITED & ORS. versus AMAZON.COM NV INVESTMENT HOLDINGS LLC & ORS on 15 February 2022
[2022] 9 S.C.R. 293
FUTURE COUPONS PRIVATE LIMITED & ORS.
v.
AMAZON.COM NV INVESTMENT HOLDINGS LLC & ORS.
(Civil Appeal Nos. 859-860 of 2022)
FEBRUARY 15, 2022
[N. V. RAMANA, CJI, A. S. BOPANNA ANDHIMA KOHLI, JJ.]
Companies Act, 2013 – ss. 230 to 232 – Continuation ofproceedings before NCLT – Aggrieved by the sale transactionbetween FRL-RG, respondent initiated an arbitration proceedingbefore the Singapore International Arbitration Center (SIAC) –Respondent obtained an injunction order from an EmergencyArbitrator appointed in pursuance of the arbitration agreementbetween the parties, by which FRL was injuncted from taking anysteps to materialize the deal, including injunction againstproceedings before various Regulatory authorities – Meanwhile,CCI and SEBI approved the composite scheme proposed followingthe suit filed by the appellant-FRL – Thereafter, appellant-FRL filedsanction of the composite scheme of arrangement under theprovisions of ss.230 to 232 of the Companies Act before NCLT andthe same was pending – Supreme Court in SLP(civil) No. 13556-57of 2021 by an interim order directed all the authorities i.e. NCLT,CCI and SEBI not pass any order for a period of four weeks – InW.P.(c) No.48 of 2022 before the Supreme Court, petitioner submittedthat the NCLT proceedings for grant of final approval of the proposedscheme ought to continue as the culmination in the final order wouldtake six to eight months for completing all the steps as requiredunder the Companies Act, 2013 – Now, in the instant case, it wassubmitted that FRL is incurring expenditure everyday and there isan imminent threat of insolvency – Any delay in the proceedingsbefore the NCLT will have serious ramifications and virtually renderthe agreement between FRL-RG redundant – Furthermore, thelivelihood of employees of FRL was also at stake – Also, thecontinuation of the NCLT proceedings will not adversely affectrespondent in any manner – Held: Considering the nature of thedispute and the fact that the proceedings before the NCLT are atadvanced stage (at stage serial No.8, as per pleadings) along with
293
A
B
C
DEF
GH
Athe fact that the appellant has incurred certain expenditure withrespect to such proceedings, the appellant is given liberty toapproach the High Court by filing an application seekingcontinuation of the NCLT proceedings beyond the stage at serialno. 8.
BCIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 859-860 of 2022.
From the Judgment and Order dated 02.02.2021 and 18.03.2021of the High Court of Delhi at New Delhi in OMP (ENF.) (COMM.) No.17 of 2021.CWith Civil Appeal Nos. 861-862, 864 and 863 of 2022.
Harish Salve, Mukul Rohatgi, K. V. Vishwanathan, GopalSubramanium, Ranjit Kumar, Aspi Chinoy, Gourab Banerji, Amit Sibal,DNakul Dewan, Sr. Advs., Ameet Naik, Raghav Shankar, Abhishek Kale,Ms. Madhu Gadodia, Harshvardhan Jha, Mrs. Yugandhara Pawar Jha,Pankaj Patel, Mahesh Agarwal, Rishi Agarwala, Karan Luthra, PranjitBhhattacharya, Rishabh Parekh, E. C. Agrawala, Ashok Panigrahi, Ms.Geetanjali, Nabab Singh, Nagarkatti Kartik Uday, Ramesh Babu M. R.,Ms. Manisha Singh, Ms. Nisha Sharma, Advs. for the appearing parties.E
The following Order of the Court was passed:
Citations and Judicial Treatment
Cited by
0
Decisions in the index citing it
Cites
0
Decisions referred to
In this index
0
Of the decisions it cites
Overruled / Questioned
0
No negative treatment found
Loading the citing and cited decisions…
This judgment in the centre: on the left the decisions it cites, on the right the decisions citing it. Colour is the treatment; choose a decision to open it.
ORDER
1. Before we deal with the issue at hand, it may be necessary torecount brief facts. Aggrieved by the sale transaction between FutureFRetail Limited (FRL)-Reliance Group, Amazon initiated an arbitrationproceeding before the Singapore International Arbitration Center (SIAC),in terms of Future Coupons Pvt. Ltd. (FCPL)-Amazon agreements.
2. Amazon filed an application for emergency relief with theregistrar of the SIAC court of arbitration seeking interim prohibitoryGinjunction to prevent FRL and FCPL from taking further steps in theaforesaid transaction with the Reliance group. Parallelly, FRL filed asuit before the Delhi High Court in CS(COMM) No. 493 of 2020, againstamazon for tortious interference in the scheme for the sale of assets.
3. Emergency Arbitrator, by order dated 25.10.2020, injunctedHFRL from taking any steps to materialize the deal, including injunction against proceedings before various Regulatory authorities. However, byorder dated 21.12.2020, Delhi High Court came to a conclusion thatRegulatory authorities had to pass appropriate orders considering therepresentation of both FRL and Amazon, before granting approvals.
4. In the meanwhile, CCI and SEBI approved the Scheme followingthe filing of the FRL suit. Further, FRL filed sanction of the compositeScheme of Arrangement under the provisions of Section 230 to 232 ofthe 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 EmergencyArbitrator award before the Delhi High Court on 25.01.2021 in OMP(ENF) (COMM.) No.17 of 2021. Vide orders dated 02.02.2021 and18.03.2021, Delhi High Court passed orders inter alia, enforcing theemergency award.
6. When the matter was carried by Amazon to this Court in SLP(C) No. 2856-57 of 2021, vide order dated 22.02.2021, this Court allowedthe NCLT proceedings to continue without culminating in a final orderof Sanction of Scheme.
7. However, as noted earlier, this Court by final order dated06.08.2021, did not adjudicate the merits of the case and limited itsreasoning only to answering the legal questions concerning themaintainability of a first appeal against an order of the learned SingleJudge in an enforcement proceeding.
8. Aggrieved by the merits of the orders of the learned SingleJudge dated 02.02.2021 and 18.03.2021, FCPL and FRL filed appealsdirectly before this Court in SLP (C) No. 13547-48 of 2021 and SLP (C)No. 13556-57 of 2021 respectively. This court by interim order dated09.09.2021, passed the following order:
“Heard learned senior counsel for the parties at length andcarefully perused the material placed on record.
Issue notice.
Taking into consideration the submissions advancedby the learned senior counsel for the parties and particularlythe fact that the parties have approached the SingaporeInternational Arbitration Centre for vacating the EmergencyAward passed by the Emergency Arbitrator and the A
B
C
D
E
F
G
H
A
Aarguments in the said matter have been concluded and theorder is going to be pronounced shortly,we think it fit tobalance the interest of both the parties by staying all furtherproceedings before the Delhi High Court for the time being.Ordered accordingly. We further direct to all the authoritiesi.e. NCLT, CCI and SEBI not to pass any final order for aBperiod of four weeks from today. This order has beenpassed with the consent of both the parties.
List these matters after four weeks.”
(Emphasis supplied)
C
9. Thereafter, the applications filed by FRL and FCPL for vacatingthe award of the Emergency Arbitrator was dismissed by the ArbitralTribunal by order dated 21.10.2021. The aforesaid order of the ArbitralTribunal, rejecting the vacate application, was challenged by FCPL andFRL before the Delhi High Court in Arb. Pet. No. 63 of 2021 and Arb.DPet. No. 64 of 2021. The Delhi High Court, while issuing notice in both the matters by orders dated 29.10.2021, rejected immediate relief toFRL. Aggrieved by the aforesaid orders, FCPL and FRL haveapproached this Court in SLP (C) Nos. 18089 and 18080 of 2021respectively.
E10. This Court by a detailed order dated 01.02.2022, passed thefollowing order in SLP (C) Nos. 13547-13548, 13556-13557, 18089 and18080 of 2021 :
“Leave granted.
..…….F
“I. Setting aside of impugned orders dated 02.02.2021 (1stimpugned Order) and 18.03.2021 (2nd impugned order) in OMP(ENF)(Comm.) No. 17 of 2021.
II. Setting aside of 3rd impugned order dated 29.10.2021 in Arb.GA. (Comm.) No. 64 and 63 of 2021. The learned Single Judgeshall reconsider the issues and pass appropriate orders on its ownmerits, uninfluenced by any observation made herein.”
At the time of the arguments of these matters, learnedSenior Counsel for the appellants argued vehemently forcontinuation of proceedings before the NCLT during the H
pendency of the above remanded matters. After reservingthese matters, W.P. (C) No. 48 of 2022 was filed by FutureRetail Limited and mentioned before this Bench on27.01.2022. We are of the opinion that the facts pleadedand arguments raised in the writ petition may have a bearingon the above-mentioned relief. We, therefore, consider itapposite to defer our orders in this context. We will considerthis 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 SeniorCounsel for the appellant, Mr. Harish Salve sought postingof all these matters before one Bench. In view of the prayermade, we request the Chief Justice of Delhi High Court topost all these matters before one Bench.”
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 forthe petitioners submits that the NCLT proceedings for grant of finalapproval of the proposed Scheme ought to continue as the culmination inthe final order would take six to eight months for completing all the stepsas required under the Companies Act, 2013. He took us through thewritten submissions filed on 09.01.2022, wherein the following stageswere listed:
A
B
C
D
E
F
GH
ABCD
EMr. Salve stated that it would take six to eight months for completingall the fifteen steps set out above. He finally submitted that it is onlywhen the final Scheme is sanctioned by the NCLT that the retail assetsof FRL would get alienated. So long as the final order of sanctioning isnot passed by the NCLT, Amazon is not prejudiced in any manner.
F12. Mr. Mukul Rohatgi, learned Senior Counsel appearing on behalfof FCPL has submitted that the Competition Commission of India hasrevoked initial Amazon-FCPL share purchase, which effectively nullifiesthe arbitration. He submits that these facts have bearing on thecontinuation of the proceedings which needs to form a part ofconsideration. Accordingly, he submits that he is willing to argue on theGaforesaid consideration before the High Court in remand.
13. On the contrary, Mr. Gopal Subramanium, learned SeniorCounsel appearing for Amazon submitted that up till now FRL hasconducted NCLT proceedings in contravention of the order of theEmergency Arbitrator as well as the Enforcement order passed by theHlearned Single Judge of Delhi High Court in OMP (ENF) (Comm) No.
17 of 2021. He stated that the order of this Court dated 01.02.2022 hasclearly remanded the matter for reconsideration by the High Court. Ifthis Court were to grant any ad-interim relief, then this Court would bebinding the High Court as to the possible view to be taken thereafter.
14. Mr. Aspi Chinoy, learned Senior Counsel appearing for theAmazon submits that FRL and FCPL are not entitled for any interimrelief as they have not challenged the initial order of the EmergencyArbitrator, which is binding on them. Lastly, Mr. Ranjit Kumar, learnedSenior counsel appearing for the Amazon, submits that FRL has alreadyundertaken 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 beforethe NCLT have reached the stage listed at serial no. 8 (Meeting of theshareholders and creditors) as indicated in the abovementioned chart.He further contended that it would take 6-8 months to complete theentire process and for actual sanctioning of the Scheme by the NCLT.In this context, if an order is passed, by the Arbitral Tribunal, in favour ofFRL, then it will be difficult to initiate fresh proceedings before NCLT atthat stage. It is his submission that FRL is incurring expenditure everydayand there is an imminent threat of insolvency. Any delay in the proceedingsbefore the NCLT will have serious ramifications and virtually render theagreement between FRL-Reliance group redundant. Furthermore, thelivelihood of 22,000 employees of FRL are also at stake. In the samebreath, he has submitted that continuation of the NCLT proceedings willnot adversely affect Amazon in any manner.
16. In view of the above submissions, we grant liberty to FRL toapproach the High Court by filing an application seeking continuation ofthe NCLT proceedings beyond the 8[th] Stage (Meeting of Shareholdersand creditors). Accordingly, we request the learned Single Judge of theDelhi High Court, to consider all the contentions raised by both the partiesin this regard and pass appropriate order as to continuation of the NCLTproceedings beyond the stage mentioned at serial no. 8 and other regulatoryapprovals expeditiously, uninfluenced by any observations made herein.
17. Civil Appeals are disposed of in terms of the aforesaid order.
Appeals disposed of.
AB
C
D
E
F
G
H