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FMCG & Retail wrap: Future Retail moves SC against Delhi HC order; IKEA to open city format stores in India

Future Retail has now filed a special leave petition before the Supreme Court of India against the orders by a single-judge bench of the Delhi High Court on February 2 and March 18, 2021. In other retail news, IKEA is going to be opening smaller format stores in India, starting with Mumbai

In yet another development in the long-drawn Future-Amazon legal battle, Future Retail has now filed a special leave petition before the Supreme Court of India against the orders by a single-judge bench of the Delhi High Court on February 2 and March 18, 2021.
This comes weeks after the promoters of Future Group, including Future Coupons, Future Corporate Resources, Kishore Biyani, Rakesh Biyani and other family members of the Biyani family also filed an SLP against Amazon to challenge and set aside the Delhi HC order that enforced the Emergency Arbitrator’s interim award. This followed a major setback for the group with the SC ruling in favour of Amazon on August 6 that the Emergency Arbitrator’s interim award was enforceable in India.
What is the February 2 and March 18 orders that Future Retail is now challenging? On February 2, 2021, Justice Midha-led single bench of Del HC issued interim orders directing a "status quo" on the Rs 24,713-crore Future Retail-Reliance Retail deal to protect Amazon. On March 18, the single bench passed final orders that EA’s interim order needs to be complied with and that the group and Biyani deliberately and willfully violated the EA order. The court directed that the assets of FCPL, FRL and Kishore Biyani be attached and issued a Show Cause notice to Biyani, Future Directors on why they should not be detained in civil prison for 3 months.
The court also levied a fine of Rs 20 lakh on Future Group and Biyani payable to the PM Relief fund. The fresh legal filing now indicates that Future Retail too, is not going to be backing down in going ahead with the deal with Reliance.
FRL indicated the same in the petition, where the company reportedly said that hearing and staying these impugned orders are of extreme urgency, and the company will go into liquidation if the deal with Reliance falls through.
FRL also reportedly said in the petition that around Rs 28,000 crore of “public money in the form of bank loans and debentures issued by FRL and its group companies is also at risk”, and that the deal falling through would also impact the livelihoods of over 35,500 employees.
The matter will be heard soon in the Supreme Court. It’s pertinent to note that a final ruling from the Singapore International Arbitration Centre is still awaited on the matter, which is likely to set the course for the future of the Future Retail-Reliance Retail deal.
Meanwhile, the approval of the scheme of amalgamation is also pending with the National Company Law Tribunal (NCLT) in Mumbai, which is currently stuck due to the orders passed by the Delhi HC.
IKEA to open city format stores in India
In other retail news, IKEA is going to be opening smaller format stores in India, starting with Mumbai. Towards the end of this year, Mumbai’s Worli area will see an 80,000 Sq Ft IKEA store that will house around 6,000 products, along with 80-seater IKEA restaurants. As part of the company’s global strategy of opening smaller city-format stores, the company plans to open 4-5 more such stores in Mumbai, and more in the country. Bengaluru is also likely to see smaller format stores in 2022-23.