Future Retail moves Supreme Court seeking relief from being declared defaulter

Source: Reuters

Future Group has once again knocked on the Supreme Court’s door, this time to seek relief from its accounts being declared as non-performing assets (NPAs) by its lenders owing to the freeze on the sale of its small-format stores given its ongoing dispute with Amazon.

On the verge of being declared a defaulter for missing payments to the banks, Future Retail claims that it is likely to face legal action from its lenders in light of circumstances that are beyond its control. These actions could include the initiation of insolvency proceedings against the entity.

Future Retail’s inability to pay off its debts to the bank is on account of the company’s inability to complete its small-format stores' asset monetisation due to injunctions orders passed by the arbitration tribunal in its dispute with Amazon.

Despite being aware of this development where Future group’s hands remain tied while the challenge to the injunction orders remains pending, the company’s lenders have issued ‘event of default’ notices to the company, it tells the top court in its plea.

Calling the lenders’ action violative of the fundamental rights of the company, the Kishore Biyani-led company has sought the top court’s intervention considering that much of the legal dispute involving Future group and Amazon now remains to be decided by the apex court.

Claiming to have extended full cooperation in the facilitation of asset monetisation to pay debts, the Future Group highlights that the action however remains subject to the pending injunction. As such, it had requested the banks to withdraw their ‘event of default’ notices. On their failure to withdraw these notices threatening legal action, the company has now sought relief from the top court.

The Supreme Court had earlier heard Amazon and Future group on the challenge to the injunction, or stay orders, passed by the SIAC-governed arbitration tribunal and had reserved the order on January 11. The outcome of the judgement would determine whether Future group can proceed with steps to be taken for payment of its debts or not.