The National Company Law Tribunal (NCLT) on Monday reserved its order on the petition filed by Amazon opposing Bank of India’s plea to initiate insolvency resolution proceedings against debt-ridden Future Retail Ltd (FRL). After hearing the arguments of Amazon and Bank of India (BoI) on Monday, the tribunal directed the e-retailer to submit its written response to the lender’s submission by Thursday.
The Mumbai bench of the NCLT, headed by Pradeep Narhari Deshmukh and Shyam Babu Gautam, reserved the order on the matter. In April this year, BoI had moved the tribunal seeking to initiate insolvency resolution proceedings against FRL, which has defaulted on loan repayments. Amazon had argued that FRL did not honour the Singapore Emergency Arbitrator’s award of October 2020 and that the lenders could not have entered into a framework agreement with FRL in breach of the award. The e-retailer had moved the Emergency Arbitrator in Singapore for alleged breach of contract by FRL.
BoI had submitted that the lender’s plea against FRL has no connection with Amazon as the proceedings are in line with the Reserve Bank of India (RBI) guidelines and the provisions of the Insolvency and Bankruptcy Code (IBC). Opposing BoI’s plea, Amazon, on May 12, filed an intervention application under Section 65 of the IBC that deals with provisions relating to penalty for fraudulent or malicious initiation of proceedings. FRL has defaulted on payment of Rs 5,322.32 crore to its lenders amid the ongoing litigations with Amazon and other related issues. Future Group’s proposed deal with Reliance, which was opposed by Amazon, also fell through.
In March, BoI through a public notice claimed its charge over the assets of FRL and warned the public against dealing with assets of the Kishore Biyani-led Future group firm. BoI is the lead lender for FRL. About the case, Dhir and Dhir Associates’ Associate Partner Ashish Pyasi opined that if the tribunal is satisfied that there is a debt and default and the proceedings are not filed for any purpose other than the resolution of the corporate debtor, then the petition against the debtor will be admitted.
“Generally, the third parties have no right or say in the insolvency proceedings and the intervention in most of the cases is rejected as the main parties to the proceedings are the petitioner and respondent. Therefore, the intervention of Amazon for rejection of the BoI petition will be tested on the above criteria,” he added.