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FRL-Amazon case: Delhi HC rules Amazon can approach regulators, but objections to merger denied

Updated : December 21, 2020 09:02 PM IST

The court said that FRL’s board resolution dated Aug 29, 2020, was neither void nor contrary to Indian laws.

In the ongoing legal dispute between Amazon and Future Retail over the merger deal with Reliance Industries, the Delhi High Court today ruled that Amazon was entitled to make representation(s) to any authority, which by itself will not constitute unlawful means or any tortious interference.

"Amazon can't be injuncted from writing to regulators, on account of potentially irreparable damage. Statutory authorities are directed to take decisions in accordance with the law," said the court.

At the same time, the court also said that FRL’s board resolution dated Aug 29, 2020, was neither void nor contrary to Indian laws, and therefore the resolution approving the proposed scheme of arrangement between Future Group and Reliance was in accordance with Indian laws and cannot be intervened with.

The court said that Amazon’s claims arising from its assertion that FRL’s board resolution approving the scheme of arrangement with Reliance was void would constitute tortious interference and adopting unlawful means.

“Amazon asserting that the Resolution dated 29th August, 2020 is void and also asserting its right conflating the Future Coupons Private Limited (FCPL) shareholder agreement and Future Retail shareholder agreement which amount to control over FRL, the act of Amazon would fall foul of the freedom of FRL and Reliance to enter into the transaction thereby causing loss to both FRL and Reliance which would be a civil wrong actionable by both FRL and Reliance in case they suffer any loss. Thus Amazon's interference on the basis of the incorrect representation would be a civil wrong committed against FRL and Reliance and would thus fall within the test as laid down for “unlawful means‟," the Court said in its order.

“This Court is prima facie of the opinion that the conflation of the three agreements i.e. FRL SHA, FCPL SHA and FCPL SSA (share subscription agreement) besides creating protective rights in favour of Amazon for its investments also transgress to 'control' over FRL requiring government approvals and in the absence thereof are contrary to FEMA FDI Rules,” the order said.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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