For deal with RIL, I have to ask Amazon sitting in US? Future Retail lawyer
The lawyer for Future Retail Limited (FRL) on Thursday told the Delhi High Court that due to the investment by Reliance, Future’s creditors worth Rs 18,000 crore are being protected. The counsel contended that these are all Indian people and alleged that Amazon doesn’t care.
The Delhi High Court is hearing Future Retail’s suit related to its deal with Reliance. It was recently halted by an Emergency Arbitrator of the Singapore International Arbitration Centre (SIAC) in favour of Amazon. The lawyers of the companies have been making arguments since last week. The matter was heard by Justice Mukta Gupta. The court adjourned the hearing till Friday, according to the information available on law platform Bar & Bench.
Future Retail which was represented by senior advocate Harish Salve told the court Future Retail does not need to seek permission from Amazon for any investments as it does not have any rights. He said Amazon only invested in Future Coupons, a promoter company of Future Retail.
“(If their argument is accepted) the degree of Amazon’s control will become enormous.. an American company with less than 10 per cent,” said Salve, according to Bar & Bench. “Can it have the right to tell whom I can do business with?… (Reliance wants to buy but) sorry I have to ask Big Brother sitting in America?.”
In August, Future Group struck a Rs 24,713-crore asset sale deal with Reliance Industries Ltd (RIL). Amazon then sent legal notice to Future, alleging the retailer’s deal breached an agreement with the American e-commerce giant. This was because last year, Amazon had bought a 49 per cent stake in one of Future’s unlisted firms Future Coupons Pvt Ltd (FCPL) for Rs 1,430 crore.
“They (Amazon) say where is the agreement with Reliance,” said Salve. “Whole business is being taken over and paid for.. if all this is agreed to, doesn’t it sound off to suggest that there is no agreement with Reliance.”
Salve argued that by seeking to be informed of all investments, Amazon is not asserting its investor protection rights but trying to get indirect control over the retailer.
“When you have passive investment of less than 10 per cent, you cannot make it an active investment. It is not investor protection,” said Salve.
He contended that FRL is a public listed company and Amazon cannot object. He argued that due to the Reliance deal, Future’s creditors worth 18000 crores are being protected.
“All these are Indian people.. Amazon doesn’t care. Indians will sort out their own problems. Why would you (Amazon) say that I wouldn’t do business,” said Salve.
He said if the Reliance-Future transaction goes through, Reliance will enter the market.
“Reliance may not be as big as Amazon, but it is a muscular company in India. What prevents Reliance from entering the online market. It will then be Amazon vs Reliance,” said Salve.
Senior advocate Darius Khambata, who made submissions on behalf of FRL, referred to the letter to the Securities and Exchange Board of India (SEBI) written by Amazon. The letter was about considering the interim judgement of a Singapore arbitration court barring the Future group’s asset sale to Reliance Retail.
“They say it is a binding order and not an opinion. Therefore, it will bind the regulator also,” Khambata. “This is an unlawful interference with my business and contractual rights,” he said.
He argued that the emergency arbitrator has no legal status and it was unfair for Amazon to drag a statutory authority.
“We say that Amazon is asserting that it has control over FRL on account of a single integrated transaction, but it did not say so before the regulator,” said Khambata, while referring to the letter sent by Future to SEBI.