New Delhi: The Delhi High Court today said that the resolution approving the proposed scheme of arrangement between Future Group and Reliance Retail is in accordance with Indian laws and cannot be intervened with, denying Amazon’s claim.
However, the court said Amazon is entitled to make representations to any authorities and can’t be injuncted from writing to regulators.
The Delhi HC on December 21 made a prima facie observation that the Emergency Award order by the SIAC is valid, and added that FRL’s suit is maintainable. The court also said the resolution of FRL’s board that approved the deal is valid.
The court also directed statutory authorities to take decisions as per the law, noting that FRL and Amazon have already made their representations and counter representations to statutory authorities/regulators.
“On two counts, FRL has been able to make out a prima facie case of tortious interference by Amazon. It is clarified that it is not the making of the representation by Amazon to the statutory authorities or the Regulators, which is an actionable wrong but making a representation based on incorrect assertions which makes the act based on ‘unlawful means'”, the Delhi HC said.
The court also said it “is prima facie of the opinion that the conflation of the three agreements i.e. FRL SHA, FCPL SHA and FCPL SSA besides creating protective rights in favour of Amazon for its investments also transgress to ‘control’ over FRL requiring government approvals and in the absence thereof are contrary to FEMA FDI Rules”.
The Competition Commission of India (CCI) has already approved the sale of Future Group’s retail and wholesale business and the logistics and warehousing business to Reliance Retail Ventures (RRVL).
Amazon, which owns 9.83 percent equity in Future Retail, has contested the deal. Amazon has argued that it has veto power over any sale of Future Coupons, in which it owns a 49 percent stake.