Reliance Retail Ventures on Wednesday approached the National Company Law Tribunal (NCLT) seeking permission to hold a shareholder meeting of Reliance Industries to consider and approve its composite scheme with Future Retail (FRL).
Reliance Industries’ counsel Janak Dwarkadas told the Mumbai bench of the tribunal that Reliance and its entities are neither parties to the proceedings between Amazon and Future in the Singapore International Arbitration Centre (SIAC) nor to the matter that is being heard in the Supreme Court. Reliance, therefore, the counsel argued, should be allowed to call a shareholder meeting to consider the deal with FRL.
Dwarkadas was referring to the legal battle between Kishore Biyani’s Future Retail and e-commerce giant Amazon, in which they have been locked since November last year, over the former's deal to sell its retail and wholesale assets to Reliance Retail for Rs 24,713 crore.
He argued that the Supreme Court had also said in its February 22 order that NCLT proceedings will be allowed to continue but not culminate in any final order of sanction of the scheme. According to the composite scheme, Reliance has only made a consideration to acquire assets from FRL and that the assets will get transferred only if the top court gives a final nod on the matter, the lawyer added.
The Emergency Arbitrator in Singapore has meanwhile passed an interim order barring the deal from proceeding. However, a final ruling on the matter is yet to be pronounced.
Reliance asserted that the legal proceedings are currently going on between FRL and Amazon and that this should not stop Reliance from calling a shareholder meeting since the final composite scheme can only be decided by the Supreme Court anyway.
“RIL is not connected to all this. If shareholders say yes, then we are okay with it (the deal). If RIL shareholders say no then the deal is gone,” Dwarkadas said during the hearing.
Reliance also informed NCLT about FRL’s application to a three-bench SIAC tribunal on March 11 this year to vacate the emergency arbitrator’s award. On May 4, FRL also wrote to the tribunal saying that it should also hear the matter regarding the jurisdiction of the award.
On May 9, Amazon wrote to the tribunal asking it to hear FRL's application to vacate the EA award and then hear jurisdiction. Following this, the SIAC tribunal decided to take up the matter from June 2 to June 4. These details were part of a rejoinder served by Amazon on the correspondence with SIAC on May 18.
However, Reliance argued that the tribunal’s hearing will have no bearings on the deal as the apex court taken up the matter and will pass the final order.
Meanwhile, Amazon, which was also present at the NCLT hearing objected to Reliance’s plea and termed the conduct of shareholder meeting illegal. “If the EA interim order subsists, NCLT hearings are illegal. There is no stay on EA order,” Amazon’s counsel told NCLT.
He also argued that every step in the transaction towards the FRL-RIL deal prejudices Amazon and that it is a violation of its rights.
NCLT has reserved RIL’s plea to hold a shareholder meeting for order and has set June 21 as the next date to hear the Future Retail and Reliance Retail’s composite scheme matter. The tribunal has also told Amazon and RIL to submit written submissions by next May 24 evening.
The Supreme Court, on the other hand, has deferred the hearing of the dispute between Amazon and Future Group to 28 June in a bid to attend to more pressing issues amid the second wave of COVID-19.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary
(Edited by : Kanishka)
First Published: May 19, 2021 7:32 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election 2024: What rural Delhi wants
May 16, 2024 10:10 PM
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM