Regulators ought to be guided by Delhi HC order: Future Retail

New Delhi, Dec 23 : Future Retail Limited (FRL) said on Wednesday that when considering Amazons objections “in accordance with the law”, the regulatory authorities ought to be guided by the Delhi High Courts order and not the Emergency Arbitration (EA) order.

In a filing with the stock exchanges, FRL said the Delhi High Court directed the statutory authorities/regulators to take a decision on the applications/objections in accordance with the law.

As there is no challenge to the EA order on merits, the Delhi High Court has not undertaken a review of it. However, given that the Delhi High Court has held that: a) the board resolution of FRL approving the scheme is valid in law; b) the conflation of FRL SHA, FCPL SHA and FCPL SSA would be illegal; and c) these were the only basis on which the Emergency Arbitration proceedings were initiated against FRL by Amazon, which have now been rejected by the Delhi High Court; the entire legal basis of the EA order stands vitiated, FRL said.

This is because the EA order is premised on a conflation of the FRL SHA, FCPL SHA and FCPL SSA and on the basis that FRL is a party to the arbitration agreement contained therein. “Accordingly, when considering Amazon’s objections ‘in accordance with law’, the regulatory authorities ought to be guided by the Delhi High Court’s order and not the EA order,” it said.

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FRL has been able to make out a prima facie case for tortious interference by Amazon. It is not the making of the representation by Amazon to statutory authorities which is an actionable wrong but the making of a representation based on incorrect assertions which makes the act based on “unlawful means”.

“In view of the above, Amazon’s interference, on the basis of the incorrect representation set out above is a civil wrong committed against FRL and Reliance and therefore SEBI cannot take cognisance of this unlawful interference in the freedom of FRL to implement the scheme sanctioned by a valid board resolution in compliance with the statutory provisions and Articles of Association of FRL,” FRL said.

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FRL said the court held that it is of the prima facie opinion that the conflation of the three agreements, i.e., FRL SHA, FCPL SHA and FCPL SSA, would render the conflated agreement violative of the FEMA FDI rules. In view of the above findings in the order, it is submitted that Amazon’s contention that its consent is required for FRL to undertake this scheme is incorrect and misplaced. Amazon’s contention would lead to an illegality and render the agreements unlawful.

FRL said the board resolution dated August 29, 2020 is prima facie neither void nor contrary to any statutory provisions nor the Articles of Association of FRL.

The suit was filed by FRL seeking relief/directions from the Delhi High Court against Amazon from tortiously interfering with and before regulatory and statutory authorities, like SEBI, etc. regarding the lawful scheme sought to be implemented between FRL and Reliance and which scheme is pending consideration as per statutory procedure before the regulatory and statutory authorities.

Disclaimer: This story is auto-generated from IANS service.

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