Future Retails Vs Amazon: 'Amazon Still Living In Days Of East India Co': Sr. Adv. Harish Salve Argues Before Delhi High Court
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After investing Rs. 1400 crores in a Rs. 25000-crore company, one cannot think that without their permission the company should not be allowed to come out of the woods in today's day and age – if one thinks this way, they are probably still living in the days of East India Company', asserted Senior Advocate Harish Salve before the Delhi High Court while hearing Future Retail Ltd's suit...
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After investing Rs. 1400 crores in a Rs. 25000-crore company, one cannot think that without their permission the company should not be allowed to come out of the woods in today's day and age – if one thinks this way, they are probably still living in the days of East India Company', asserted Senior Advocate Harish Salve before the Delhi High Court while hearing Future Retail Ltd's suit against Amazon Inc publicizing an Emergency Arbitrator's award injuncting the Future Group-Reliance acquisition deal.
The Delhi High Court has adjourned the case to Nov 19, and directed all parties to submit their written submissions.
The court was hearing Salve on his rejoinder to Sr. Adv. Gopal Subramanium's submissions made on behalf of Amazon Inc, in a hearing yesterday.
Responding to them, Salve raised various points, including that the suit filed by Future Retail Ltd had been mis-characterized by Amazon as an anti-arbitration suit, and it wasn't one. It merely sought non-interference by Amazon in what it termed as an 'illegal interference in a lawful contract' between itself and Reliance.
Questioning the validity of the Emergency Arbitrator's award in India, he stated that, 'An order passed by some gentleman sitting somewhere in Singapore has no efficacy in law,' and that 'If it was an order by a Court' Future Retail could not ignore it. He elaborated that while the Emergency Arbitrator appointed, Mr. V.K. Raja was a very fine jurist, he was speaking as a "matter of law".
Arguing against Sr. Adv. Subramanium's application of the Arcelor Mittal judgment of the Supreme Court in the present case, Salve stated that Amazon could not claim the benefits of the proposition in the Arcelor Mittal judgment because while that judgment dealt with protection of minority shareholder's rights, Amazon was not even a shareholder in Future Retail Ltd.
Salve further stated that by his investment acquiring 49% stake in Future Coupons Pvt Ltd, Amazon had not just obtained the stake but even control in the company, because he claimed that the promoters had to 'invite' Amazon Inc for investments and it was seeking to direct Future Retail Ltd.
Upping the ante on the rhetoric, Salve then said that, the scene now was such that 'tens of thousands of crores in banks could sink, but the American giant (Amazon) wasn't to be affected,' merely because it'd invested Rs.1400 crores in Future Coupons.
He emphasized Future Retail's position that, through the suit it was merely stating that it had 'not entered into any agreement handing over the reins of the company to Amazon' and therefore it was entitled to this, because otherwise Amazon was interfering in the affairs of FRL without holding a single share in it.
Salve also submitted vehemently that, if Amazon 'could've bought shares in the company, it should've bought them and faced the consequences.'
Responding to the question of Nominee Directors being present on the board, Salve submitted that it is settled law that if a company is sinking, even the Nominee Directors have a fiduciary duty to act in the best interest of the shareholders.
He said that FRL being a public listed entity, with stakes of thousands of shareholders running on it, it was a fit case for the application of the judgment in the RNRL-RIL case, in which the court had noted that RNRL was a listed entity and that the company and the promoters' personalities had to be viewed as separate entities.
On these lines, Salve suggested that if Amazon's 'well-made plans' had come off, it could sue the Biyanis for the Rs. 1400 crores, but no action could lie against FRL.
The Singapore International Arbitration Tribunal had earlier injuncted Reliance Industries Ltd's acquisition of some Future Group entities for Rs.24,713 crores on a plea for the same by Amazon Inc. Amazon had approached the Tribunal invoking the provision for Interim and Emergency Relief provided for under Rule 30 of the Singapore International Arbitration Centre Rules, 2016.