Amazon vs Future Group feud

Amazon vs Future Group feud, “Amazon is not even a minority shareholder”: Salve

Distinguished advocate Harish Salve asserted before the Delhi HC that Amazon has consciously mischaracterized the Future Retail Limited (FRL) suit in order to confuse the Hon’ble court. In Amazon vs Future Group feud, Salve pointed out various paragraphs from the plaints in his rejoinder before the Delhi HC. Narrating all the established facts as to how Amazon is trying to put off FRL’s efforts to recover from its current crisis, Salve also presented a hairy metaphor- “Amazon is the clean-shaven person who is trying to join a race only for bearded people, and saying that it could have grown a beard.”

The Emergency Arbitrator of the Singapore International Arbitration Centre (SIAC) had passed a stay order which delayed the sale of Future Group. Amazon is an investor in the Future Retail Group and hence moved to an emergency arbitration in Singapore on the grounds that Reliance belonged in the negative list along with the 30 entities with which Future Group was prohibited from contracting.

Read more about the order

Post this order, Future Retail filed a suit against Amazon preventing it from prying in its deal with Reliance.

Rendering this order as worthless, Salve stated that he is subject to Indian courts. If an entity from Singapore says something, he is not entitled to follow through with the same. Further adding that he does not mean to show any disrespect as he is simply stating this as a matter of law.

Salve further argued that Amazon held shares only in Future Coupons (FCPL), a shareholder of FRL. Hence it shouldn’t be allowed to have a say in the matters of FRL.

His first submission was that Amazon chose not to invest through Foreign Direct Investment (FDI) or Foreign Portfolio Investment. Investing via FDI in FRL meant having prior government permission since FRL. Amazon cannot seek control over the decisions of FRL or even exercise voting rights since it’s a minority shareholder. Arguing about FRL’s financial stringency, Salve stated that thousands may lose their jobs and FRL may go bankrupt if this sale doesn’t go through. The numbers injected by Amazon in FRL and what Reliance is offering are poles apart. FRL needs that amount to safeguard themselves. Besides, if Amazon has a tiff, they should take it up with Future Group’s promoter, Kishore Biyani and not FRL.

Owing to the absence of contractual rights, voting rights or board position, Salve made a shrewd observation stating that Amazon still thinks that we live in colonial times. Without holding any strong authority over FRL, Amazon wants a company to stop taking a decision from saving themselves. Salve stated,

“Amazon has no voting rights or Board position, but says that you dare not take a decision without me on saving yourself…In today’s day and age, to say that I will kill a 25k crore company…God knows if Amazon still thinks that it’s living during the time of the East India Company!”

Salve presented the control clause mentioned in the FCPL Share Holding Agreement read along with Amazon’s submissions before the Competition Commission of India (CCI).  The particular clause explicitly claims that Amazon is not invested in FRL and hence it does not seek to claim any control over FRL. Either this clause is true or it’s a ploy to deceive the regulating bodies. 

Further, Salve clarified the independent status of FRL’s Share Holding Agreement (SHA) and FCPL’s SHA, FRL had reserved its rights of including entities in the forbidden transacting list. The list is agreed upon with FCPL annually and therefore FCL is well within the ambit of its rights to transact with Reliance unless FCPL disagrees. In case Amazon is against this decision, it should take it up with FCPL and not FRL.     In any case, there are no contractual obligations agreed upon between the Promoter Kishore Biyani and Amazon (which is a 3rd party here) that FRL can be bound with if these conditions are absent from the Articles of Association. The next hearing for this matter shall be held on November 19.

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