Delhi HC Upholds Emergency Award Passed against Future-Reliance Deal; Orders Attachment of Kishore Biyani's Properties
The Delhi High Court (HC) on Thursday upheld the emergency award passed by Singapore’s emergency arbitrator’s (EA) against the deal between Future Retail Ltd (FRL) and Reliance Retail Ventures Ltd. The HC also directed attachment of properties of Kishore Biyani and others related to Future group.
While rejecting the Future group's argument that the emergency award is a nullity, the HC imposed costs of Rs20 lakh on the Kishore Biyani-led group. This cost would be deposited with Prime Minister’s Relief Fund for providing COVID-19 vaccines to senior citizens from below poverty line (BPL) category.
Justice JR Midha asked the Kishore Biyani-led FRL to not take additional motion on the deal and held that the group wilfully violated Singapore arbitrator’s order.
While asking for the presence of Mr Biyani and others before it on 28 April 2021, the HC asked them to show cause as to why they be not detained for three months under civil prison for violating emergency arbitrator's order.
In a statement, the Future group, however, says, the ruling of the Delhi HC has no bearing on the status quo of the case, which is now pending before the Supreme Court. "Today’s Delhi HC order has no bearing on status quo of case since it is already in SC, where next hearing is expected to be in April. The National Company Law Tribunal (NCLT) is allowed to continue its proceedings but same shall not culminate in any final order of the sanction of the scheme," the statement says.
Earlier in February this year, the single-judge bench of Justice Midha formed a prima facie view that the emergency award is enforceable under section 17(2) of the Arbitration Act. It stated, "Emergency Arbitrator rightly proceeded against Future Retail, emergency award is not a nullity." Emergency award is enforceable under Section 17(2) and appeal-able under Section 37 Arbitration Act.
The HC had also directed Future Retail to state all steps and actions taken by it after the date of the emergency award on 25 October 2020, in connection with the deal with the Reliance group company.
On 8 February 2021, the Delhi HC had stayed the implementation of status quo ordered by a single-judge bench on the Rs24,713-crore deal between Future Retail and Reliance Retail.
In August 2020, Kishore Biyani and Future group had entered a Rs25,000 crore agreement with Reliance Retail. As part of the pact, Future group was to sell its retail, wholesale, logistics and warehouse businesses to Reliance Retail Ventures.