FUTURE COUPONS PRIVATE LIMITED vs. AMAZON.COM NV INVESTMENT HOLDINGS LLC

REPORTABLE 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 O R D E R 1. Before we deal with the issue at hand, it may be necessary to   recount   brief   facts.   Aggrieved   by   the   sale   transaction between   Future   Retail   Limited   (FRL)­Reliance   Group, Signature Not Verified Digitally signed by SATISH KUMAR YADAV Date: 2022.02.15 15:26:44 IST Reason: Amazon   initiated   an   arbitration   proceeding   before   the 1 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. 3 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 ) 4 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.” 6 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:

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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 th continuation of the NCLT proceedings beyond the 8  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 12