The Supreme Court Friday asked whether it can pass any interim order on a plea of Amazon that Future Retail Ltd’s assets including ’Big Bazaar shops’ not be alienated till the dispute over it’s merger with Reliance Retail is decided by the arbitral tribunal.
A bench headed by Chief Justice N V Ramana, which has now posted the plea of US e-commerce major for further hearing on April 4, said the landlords of the FRL’s shops are not before it and the question is if such an order restraining the alienation of assets till conclusion of arbitration can be passed.
“If tenants or landlords are not before us how can the court pass an order injuncting them from taking possession (of shops),” said the bench which also comprised Justices Krishna Murari and Hima Kohli.
Reuters reported that Reliance has privately defended an abrupt takeover of the stores of debt-laden rival Future Retail, saying mounting dues of $634 million compelled it to act beyond expectations, a company letter shows.
The takeover was part of the race to dominate a $900-billion retail sector that set off a bitter dispute in which India’s Supreme Court will decide whether Reliance or Amazon.com Inc gets to scoop up Future’s assets.
The March 8 letter, seen by Reuters, reveals for the first time Reliance’s stance on the events of the night of Feb. 25, when staff suddenly showed up at many of its rival’s stores to take control over missed lease payments.
That move stunned not only Future but also Amazon, which has cited violation of certain contracts to legally block, since 2020, a $3.4-billion deal between the two Indian giants.
In the letter, Reliance said it went “well and truly beyond what can be expected” to keep Future “out of harm’s way,” as it took “significant steps” to ensure business continuity at Future and make sure there was “no impediment” to their deal.
These steps included financial support of 48 billion rupees ($634 million), comprising 11 billion rupees of unpaid lease rentals and 37 billion rupees of working capital.
Over months, Reliance had taken over the leases of more than 900 of Future’s 1,500 stores, while still allowing the company to run them.
Future – which has more than 1,700 outlets, including popular Big Bazaar stores – has been unable to make lease payments for a bulk of its outlets.
With landlords insisting on payments or shutting down of stores, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores. It also offered all the 30,000 employees of Future Retail jobs.
In addition, a majority of inventory at these stores was being supplied by Reliance JioMart as a cash-strapped FRL could not clear dues to existing suppliers.