Supreme Court Advises Settlement Of Future-Amazon-Reliance Dispute
By A Special Correspondent
First publised on 2022-03-04 03:18:59
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In a surprising but excellent development, the Supreme Court warned Future Retail, Amazon and Reliance Retail that any judicial order in their ongoing dispute over the acquisition of Future Retail assets is likely to hurt one of the parties and suggested that they settle the dispute through negotiations. The parties agreed with alacrity. The court gave them 10 days and asked for a progress report by March 15.
The Future-Amazon-Reliance dispute has reached a stage where each of the parties is approaching the court for even the smallest of things. There are several court orders and it is not clear what can or cannot be done by a party without contravening one of them. The dispute is becoming intractable and can go on for ages if things continue like this. That would not be fair to Future Retail creditors.
The court is right that any final judicial order in the case is likely to hurt one of the parties. Hence, it will be better if all the parties sit together and work out a deal that is fair to all, including the creditors of Future Retail. For, Future wants to sell its assets mainly because it is unable to pay its dues. Banks are involved and they have already threatened to invoke IBC. If that happens, it will hurt Amazon as it has not matched Reliance's offer.
What should now happen is that Reliance and Amazon should bid (as suggested by the consortium of banks) for the assets of Future Retail. But the higher bid should take into account two things: one, the demand of the creditors of Future Retail and two, the financial interests of the losing party. Amazon claims its agreement with Future grants it the right of first refusal. It can be given that right to quote for the assets first. If that bid is low and not acceptable, it will stand to lose that right.
An honourable deal must be struck through negotiation that protects the interests of all parties, including the creditors of Future Retail. It is obvious that all parties will not be compensated in full. But since these are prized assets and Reliance has already offered Rs 24713cr (in August 2020) for them, a benchmark figure exists. It can be used to further modify the deal and make it better for all parties.
