Future Retail Ltd. v. Amazon Com Investment Holdings Llc, Delhi High Court, Judgment, Law, casemine.com

Precedent	Rule or Principle Cited For	Application by the Court
Sumitomo Heavy Industries Ltd. v. ONGC Ltd., (1998) 1 SCC 305	Explains interplay of proper law of contract, arbitration agreement, and curial law in arbitration	Followed to uphold party autonomy in choosing laws governing arbitration
Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603	Supports party autonomy and arbitration framework	Consistent precedent endorsing arbitration principles
Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49	Defines fundamental or public policy of India	Used to assess legality of two-tier arbitration agreement
Avitel Post Studioz Ltd. & ors. vs. HSBC PI Holdings (Mauritius) Ltd., 2020 SCC OnLine 656	Parliament’s non-enactment of Law Commission’s recommendation does not bar judicial development of law	Applied to hold Emergency Arbitrator not excluded under A&C Act despite no legislative amendment
Bharat Aluminium Co. vs. Kaiser Aluminium Technical Services Inc. (BALCO), (2012) 9 SCC 522	Applicability of Part I of A&C Act in international commercial arbitration	Clarifies derogability of Section 9 in international arbitration
Vodaphone International Holdings B.V. Vs. Union of India, (2012) 6 SCC 613	Nature and enforceability of shareholders' agreements	Held SHA is a private contract binding only parties thereto, subordinate to Articles of Association
Satyabrata Ghose Vs. Mugneeram Bangor & Co., AIR 1954 SC 44	Doctrine of frustration and contract impossibility under Section 56 of Contract Act	Applied to assess supervening circumstances affecting contract performance
Energy Watchdog vs. Central Electricity Regulatory Commission & Ors, (2017) 14 SCC 80	Doctrine of force majeure and frustration of contract	Adopted multi-factorial approach to supervening circumstances
Arcelormittal India Pvt. Ltd. vs. Satish Kumar Gupta & Ors., 2019 (2) SCC 1	Interpretation of 'control' under Insolvency and Bankruptcy Code and related laws	Used to analyze whether rights amount to control over FRL
OBG Ltd v Allan, [2007] UKHL 21	Clarifies torts of unlawful interference and inducing breach of contract	Guides analysis of tortious interference by Amazon
Lindsay International Vs. L.N. Mittal, 2017 SCC Online Cal 14920	Ingredients of tortious unlawful interference	Applied to test Amazon’s alleged unlawful interference
Dalpat Kumar & Anr. vs. Prahlad Singh & Ors, 1992 (1) SCC 719	Principles for grant of interim injunction	Framework used to assess injunction application
Gujarat Bottling Co.Ltd. & Ors. vs. Coca Cola Co. & Ors, 1995 (5) SCC 545	Reiterates principles for interlocutory injunction balancing rights and hardships	Applied in weighing balance of convenience and irreparable injury

Dave, Kurian Joseph and Amitava Roy, JJ.] this Court dealt with party autonomy from the point of view of the contracting parties and its importance in commercial contracts. In para 5 of the Report, it was observed: (SCC p. 130)

5. Party autonomy being the brooding and guiding CS(COMM) 493 of 2020 Page 65 of 132 spirit in arbitration, the parties are free to agree on application of three different laws governing their entire contract (1) proper law of contract, (2) proper law of arbitration agreement, and (3) proper law of the conduct of arbitration, which is popularly and in legal parlance known as curial law. The interplay and application of these different laws to an arbitration has been succinctly explained by this Court in Sumitomo Heavy Industries Ltd. v. ONGC Ltd., [Sumitomo Heavy Industries Ltd. v. ONGC Ltd., (1998) 1 SCC 305] which is one of the earliest decisions in that direction and which has been consistently followed in all the subsequent decisions including the recent Reliance Industries Ltd. v. Union of India [Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603 : (2014) 3 SCC (Civ) 737] . (Emphasis supplied) 8.14 In Centrotrade (supra), a three judge bench of the Supreme Court was called upon to test the legality of a double-tier arbitration agreement. The parties had agreed that if either of them is dissatisfied with the domestic award rendered in India, they would have the right to appeal in a second arbitration seated in London. The Supreme Court upheld the validity of the double-tier arbitration agreement between the parties. Dealing with the issue of public policy of India, Supreme Court held that there is nothing in the A&C Act that prohibits the contracting parties from agreeing upon a second instance or the appellate arbitration-either explicitly or implicitly. No such prohibition or mandate can be read into the A&C Act except by an unreasonable and awkward misconstruction and by straining its language to a vanishing point. The Court further noted that despite granting finality to the domestic award as per the A&C Act, the parties deliberately and consciously chose to agree upon an appellate arbitration, and that one party cannot wriggle out of solemn commitment made by it voluntarily. The CS(COMM) 493 of 2020 Page 66 of 132 relevant observations of the Supreme Court in addition to the aforementioned extract, are set out hereunder:- 46.For the present we are concerned only with the fundamental or public policy of India. Even assuming the broad delineation of the fundamental policy of India as stated in Associate Builders v. Delhi Development Authority ., (2015) 3 SCC 49 : (2015)

2 SCC (Civ) 204] we do not find anything fundamentally objectionable in the parties preferring and accepting the two- tier arbitration system. The parties to the contract have not by- passed any mandatory provision of the A&C Act and were aware, or at least ought to have been aware that they could have agreed upon the finality of an award given by the arbitration panel of the Indian Council of Arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration. Yet they voluntarily and deliberately chose to agree upon a second or appellate arbitration in London, UK in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. There is nothing in the A&C Act that prohibits the contracting parties from agreeing upon a second instance or appellate arbitration either explicitly or implicitly. No such prohibition or mandate can be read into the A&C Act except by an unreasonable and awkward misconstruction and by straining its language to a vanishing point. We are not concerned with the reason why the parties (including HCL) agreed to a second instance arbitration the fact is that they did and are bound by the agreement entered into by them. HCL cannot wriggle out of a solemn commitment made by it voluntarily, deliberately and with eyes wide open." (Emphasis supplied) 8.15 In the present case, the parties have expressly chosen the SIAC Rules as the curial law governing the conduct of arbitration proceedings. The said Rules are self sufficient to govern the proceedings under arbitration at every stage. The Courts in such cases would uphold the express choice of the parties subject to the public policy of India and the mandatory provisions of CS(COMM) 493 of 2020 Page 67 of 132 the A&C Act. As observed by the Supreme Court in NTPC v. Singer (Supra), it would be unlikely for the Courts to interfere with such arbitral proceedings except in cases which shock the judicial conscience. 8.16 Rule 30 of the SIAC Rules deals with Interim and Emergency Relief. Rule 30.3 in clear terms provides that the parties to the arbitration are also entitled to apply to a judicial authority for grant of interim relief, and that such request made to a judicial authority for grant of interim relief shall not be incompatible with the SIAC Rules. Therefore, the SIAC rules themselves recognize and uphold the right of a party to avail interim relief under Section

9 of the A&C Act. The SIAC rules however provide an option to the aggrieved party to either approach the emergency arbitrator for interim relief, or to approach a judicial authority for the same, prior to the constitution of the Tribunal. In such circumstances, this Court finds that the SIAC Rules do not take away the substantive right of the parties to approach the Courts in India for interim relief. 8.17 Where the parties exercising autonomy expressly choose different procedural rules for conduct of arbitration, they are assumed to be aware of the provisions of such rules, including the procedure for obtaining interim relief, and the fact that such rules provide for emergency arbitration by appointment of an emergency arbitrator. In the present case, the parties had with open eyes left it for themselves, to choose between availing interim relief from the emergency arbitrator on the one hand, or the Courts under Section 9 of the A&C Act on the other hand. Thus, Amazon has exercised its choice of the forum for interim relief as per the arbitration agreement between the parties. Nothing in the A&C Act prohibits the parties from doing so. CS(COMM) 493 of 2020 Page 68 of 132 8.19 The Indian law of arbitration allows the parties to choose a procedural law different from the proper law, and this Court finds that there is nothing in the A&C Act that prohibits the contracting parties from obtaining emergency relief from an emergency arbitrator. An arbitrators authority to act is implied from the agreement to arbitrate itself, and the same cannot be restricted to mean that the parties agreed to arbitrate before an arbitral tribunal only and not an Emergency Arbitrator. Further the parties having deliberately left it open to themselves to seek interim relief from an emergency arbitrator, or the Court in terms of Rule 30.3 of SIAC Rules, the authority of the said emergency arbitrator cannot be invalidated merely because it does not strictly fall within the definition under Section 2(1)(d) of the A&C Act. 8.20 Mr. Harish Salve, learned Senior Counsel on behalf of FRL contended that under Section 2(d) of the A&C Act, the term 'arbitral tribunal' cannot deem to include an Emergency Arbitrator for the reason the same was recommended by the Law Commission in its 246th Report, however, the said recommendation was not accepted by the Parliament and no amendment was brought to Section 2(1)(d) of the A&C Act. It is thus contended that what was expressly rejected by the Parliament cannot be deemed to be included in the definition of 'arbitral tribunal' under Section 2(1)(d) of the A&C Act. On the contrary, Mr.Gopal Subramanium contended that the Parliament in its wisdom did not accept the recommendation of the Law Commission to provide for an Emergency Arbitrator in the amendment to the A&C Act, does not mean that the Emergency Arbitrator was excluded in the A&C Act, and that the recommendation of the Law Commission has no bearing on the CS(COMM) 493 of 2020 Page 69 of 132 interpretation of a provision in the A&C Act. 8.21 In the decision reported as 2020 SCC OnLine 656 Avitel Post Studioz Ltd. & ors. vs. HSBC PI Holdings (Mauritius) Ltd., Supreme Court dealing with the contention that an amendment to Section 16 proposed by the 246 Law Commission Report in the light of the Supreme Court decision i.e. 2010 (1) SCC 72 N. Radhakrishnan vs. Maestro Engineers which appears to denude an Arbitral Tribunal of the power to decide on issues of fraud etc. claimed that the decision in N. Radhakrishnan (supra) having not been legislatively overruled, cannot now be said to be in any way deprived of its precedential value, as the Parliament has taken note of the proposed Section

16 (7) in the 246 Law Commission Report, and has expressly chosen not to enact it. Supreme Court held that the development of law by the Supreme Court cannot be thwarted merely because a certain provision recommended in a Law Commission Report is not enacted by the Parliament. It noted that the Parliament may have felt, that it was unable to make up its mind and instead, leave it to the Courts to continue, case by case, deciding upon what should constitute the fraud exception. Parliament may also have thought that Section 16(7), proposed by the Law Commission, is clumsily worded as it speaks of a serious question of law, complicated questions of fact, or allegations of fraud, corruption, etc. The judgment of the Supreme did not lay down that serious questions of law or corruption etc. is vague and, therefore, Parliament may have left it to the Courts to work out the fraud exception. 8.22 In view of the decision of Supreme Court in Avitel Post (supra), it cannot be held that an Emergency Arbitrator is outside the scope of Section 2(1)(d) of the A&C Act, because the Parliament did not accept the CS(COMM) 493 of 2020 Page 70 of 132 recommendation of the Law Commission to amend Section 2(1)(d) of the A& C Act to include an ' Emergency Arbitrator'. 8.23 FRL has also relied upon Section 2(6) of the A&C Act to contend that the said provision grants freedom to the parties to authorise any person including an institution to determine a certain issue, only when Part 1 of the A&C Act allows the parties to do so. It was submitted that since Part 1 of the A&C Act does not grant parties, the freedom to approach any other person except the Court under Section 9 of the A&C Act and the Tribunal under Section 17 for grant of interim relief, it is apparent that Emergency Arbitrator is incompatible with the provisions of the A&C Act. Further, FRL relied on Section 2(8) of the A&C Act and contended that although this provision also recognizes the agreement of parties as to arbitration rules, but such rules cannot override the provisions of Part 1 of the A&C Act itself. 8.24 As noted in the proviso to Section 2(2) of the A&C Act, in the case of an International Commercial Arbitration even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognized under the provisions of Part II of the A&C Act, provisions of Section 9, 27 and Clause (b) of sub Section (1) and sub Section (3) of Section 37 of the A&C Act, would be applicable, subject to an agreement to the contrary between the parties. Thus, parties by agreement can decide to the inapplicability of these provisions. The phrase even if the place of arbitration is outside India, further makes it clear that the said entitlement of the parties to exclude the aforementioned provisions by agreement is available in international commercial arbitrations seated in India, and even if the seat of such international commercial arbitration is outside India. Clarifying the position, Supreme Court in (2012) 9 SCC 522 CS(COMM) 493 of 2020 Page 71 of 132 Bharat Aluminium Co. vs. Kaiser Aluminium Technical Services Inc. (BALCO) held that if the parties to an arbitration seated outside India choose the A&C Act to govern the arbitration proceedings, it would still not make Part 1 of the A&C Act applicable. Instead, only the provisions in the A&C Act relating to the internal conduct of the arbitration proceedings will be applicable, to the extent they are not inconsistent with the mandatory provisions of the curial law of the seat of arbitration. Thus, the fact that applicability of Section 9 can be excluded in an International Commercial Arbitration, conducted as per the provisions of A&C Act indicates that Section 9 of the A&C Act is not a mandatory provision. 8.25 Thus, this Court finds no merit in the contention of FRL with respect to Section 2(6) and 2(8) of the A&C Act, in view of the finding that the SIAC Rules relating to emergency arbitration are not contrary to the mandatory provisions of the A&C Act. As discussed above, the parties have chosen SIAC Rules that grant them freedom to approach the Court also under Section 9 of the A&C Act to obtain interim relief, thus, to that extent there is no incompatibility between Part I of the A&C Act and the SIAC Rules. 8.26 From a conspectus of the discussion above, this court arrives at the conclusion that Firstly, the parties in an international commercial arbitration seated in India can by agreement derogate from the provisions of Section 9 of the A&C Act; Secondly, in such a case where parties have expressly chosen a curial law which is different from the law governing the arbitration, the court would look at the curial law for conduct of the arbitration to the extent that the same is not contrary to the public policy or the mandatory requirements of the law of the country in which arbitration is held; Thirdly, CS(COMM) 493 of 2020 Page 72 of 132 inasmuch as Section 9 of the A&C Act along with Sections 27, 37(1)(a) and 37(2) are derogable by virtue of the proviso to Section 2(2) in an International arbitration seated in India upon an agreement between the parties, it cannot be held that the provision of Emergency Arbitration under the SIAC rules are, per se, contrary to any mandatory provisions of the A&C Act. Hence the Emergency Arbitrator prima facie is not a coram non judice and the consequential EA order not invalid on this count. Whether the Resolution of FRL dated 29th August, 2020 is void or contrary to statutory provisions 9.1 Supreme Court in (2012) 6 SCC 613 Vodaphone International Holdings B.V. Vs. Union of India that a shareholders' agreement (SHA) is essentially a contract between some or all shareholders in a company, the purpose of which is to confer rights and impose obligations over and above those provided by the company law. It was held that SHA is a private contract between the shareholders compared to the Articles of Association of the company, which is a public document. Being a private document, it binds parties thereon and not the other remaining shareholders of the company. Explaining the advantages of a SHA, Supreme Court noted that it gives greater flexibility, unlike Articles of Association and makes provision for resolution of any dispute between the shareholders and also how the future capital contributions have to be made. It was further held that the provisions of the SHA may also go contrary to the provisions of the Articles of Association, however, in that event, naturally provisions of Articles of Association would govern and not the provisions in SHA. 9.2 Following the decision in AIR 1965 SC 1535 Shanti Prasad Jain Vs. Kalinga Tubes Limited, Supreme Court in Vodaaphone (supra) further held CS(COMM) 493 of 2020 Page 73 of 132 that the agreement between non-members and members of a company will not bind the company, but there is nothing unlawful in entering into agreement for transferring of shares. Of course, the manner in which such agreement is to be enforced in the case of breach is given in the general law between the company and the shareholders. A breach of SHA which does not breach the articles of association is a valid corporate action and the parties aggrieved can get remedies under the general law of the land. 9.3 Therefore, a shareholders agreement is a private contract between the shareholders, an agreement enforceable under the Contract Act and for the breach thereof, any party aggrieved can seek remedy under the law or in case provided under the agreement through arbitration, however, as held by the Supreme Court in case of conflict between the shareholders agreement and the Articles of Association of the company, the later will prevail. 9.4 The rationale behind the Articles of Association of a company prevailing over a shareholder's agreement stems from the basic principles that the general law i.e. the Contract Act has to give way to the Special Act

i.e. the Companies Act, in case of conflict. Indubitably, it is in the interest of the society that the integrity of the contracts are maintained as contractual remedies promise broad commercial stability, however it is equally true that the Indian Contract Act is not a complete Code as was noted by the Privy Council in AIR 1929 PC 132 Jwaladutt R. Pillani vs. Bansilal Moti Lal based on the preamble of the Indian Contract Act, 1872 which notes, "whereas it is expedient to define and amend certain parts of the law relating to contracts". 9.5 Further, Section 56 of the Contract Act acknowledges the supervening circumstances not contemplated by the parties resulting in CS(COMM) 493 of 2020 Page 74 of 132 making the contract impossible of being performed. Supervening circumstances/ subsequent impossibilities on occurrence of an unexpected event or change of circumstances which are beyond what was contemplated by the parties at the time when they entered into the agreement have been duly recognized in the various Supreme Court decisions. In AIR 1954 SC 44 Satyabrata Ghose Vs. Mugneeram Bangor & Co. & Anr. Supreme Court held that when such an event or change of circumstance occurs, which is so fundamental, to be regarded by law striking at the root of contract as a whole, it is the Court which can pronounce the contract to be frustrated and at an end. It was held that the word "impossible" has not been used in the Section, in the sense of physical or literal impossibility and though the performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose of the parties. 9.6 Supreme Court in the decision (2017) 14 SCC 80 Energy Watchdog vs. Central Electricity Regulatory Commission & Ors. noted the evolution of law in relation to the impact of an unforeseen event on the performance of a contract, after it is made, as under: "34. Force majeure is governed by the Contract Act, 1872. Insofar as it is relatable to an express or implied clause in a contract, such as the PPAs before us, it is governed by Chapter III dealing with the contingent contracts, and more particularly, Section 32 thereof. Insofar as a force majeure event occurs dehors the contract, it is dealt with by a rule of positive law under Section 56 of the Contract Act. Sections 32 and 56 are set out herein:

32. Enforcement of contracts contingent on an event happening.Contingent contracts to do or not to do anything if an uncertain future event happens, CS(COMM) 493 of 2020 Page 75 of 132 cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void. xx xx xx

56. Agreement to do impossible act.An agreement to do an act impossible in itself is void. Contract to do act afterwards becoming impossible or unlawful.A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the Act becomes impossible or unlawful. Compensation for loss through non-performance of act known to be impossible or unlawful.Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non- performance of the promise.

35. Prior to the decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3 B & S 826 : 122 ER 309 : (1861-73) All ER Rep 24], the law in England was extremely rigid. A contract had to be performed, notwithstanding the fact that it had become impossible of performance, owing to some unforeseen event, after it was made, which was not the fault of either of the parties to the contract. This rigidity of the Common law in which the absolute sanctity of contract was upheld was loosened somewhat by the decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3 B&S 826 : 122 ER 309 : (1861-73) All ER Rep 24] in which it was held that if some unforeseen event occurs during the performance of a contract which makes it impossible of performance, in the sense that the fundamental basis of the contract goes, it need not be further performed, as insisting upon such performance would be unjust. CS(COMM) 493 of 2020 Page 76 of 132

36. The law in India has been laid down in the seminal decision of Satyabrata Ghose v. Mugneeram Bangur & Co. [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : AIR 1954 SC 44] The second paragraph of Section 56 has been adverted to, and it was stated that this is exhaustive of the law as it stands in India. What was held was that the word impossible has not been used in the section in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose of the parties. If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the Act which he had promised to do. It was further held that where the Court finds that the contract itself either impliedly or expressly contains a term, according to which performance would stand discharged under certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Act. If, however, frustration is to take place dehors the contract, it will be governed by Section 56.

37. In Alopi Parshad & Sons Ltd. v. Union of India [Alopi Parshad & Sons Ltd. v. Union of India, (1960) 2 SCR 793 : AIR 1960 SC 588] , this Court, after setting out Section 56 of the Contract Act, held that the Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration, for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made. It is only when a consideration of the terms of the contract, in the light of the circumstances existing when it was made, showed that they never agreed to be bound in a fundamentally different situation which had unexpectedly emerged, that the contract CS(COMM) 493 of 2020 Page 77 of 132 ceases to bind. It was further held that the performance of a contract is never discharged merely because it may become onerous to one of the parties.

38. Similarly, in Naihati Jute Mills Ltd. v. Khyaliram Jagannath [Naihati Jute Mills Ltd. v. Khyaliram Jagannath, (1968) 1 SCR 821 : AIR 1968 SC 522] , this Court went into the English law on frustration in some detail, and then cited the celebrated judgment of Satyabrata Ghose v. Mugneeram Bangur & Co. [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : AIR 1954 SC 44] Ultimately, this Court concluded that a contract is not frustrated merely because the circumstances in which it was made are altered. The courts have no general power to absolve a party from the performance of its part of the contract merely because its performance has become onerous on account of an unforeseen turn of events.

39. It has also been held that applying the doctrine of frustration must always be within narrow limits. In an instructive English judgment, namely, Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH [Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH, 1962 AC 93 : (1961) 2 WLR 633 : (1961) 2 All ER 179 (HL)] , despite the closure of the Suez Canal, and despite the fact that the customary route for shipping the goods was only through the Suez Canal, it was held that the contract of sale of groundnuts in that case was not frustrated, even though it would have to be performed by an alternative mode of performance which was much more expensive, namely, that the ship would now have to go around the Cape of Good Hope, which is three times the distance from Hamburg to Port Sudan. The freight for such journey was also double. Despite this, the House of Lords held that even though the contract had become more onerous to perform, it was not fundamentally altered. Where performance is otherwise possible, it is clear that a mere rise in freight price would not allow one of the parties to say that the contract was discharged by impossibility of performance.

40. This view of the law has been echoed in Chitty on Contracts, 31st Edn. In Para 14-151 a rise in cost or expense has been stated not to frustrate a contract. Similarly, in Treitel CS(COMM) 493 of 2020 Page 78 of 132 on Frustration and Force Majeure, 3rd Edn., the learned author has opined, at Para 12-034, that the cases provide many illustrations of the principle that a force majeure clause will not normally be construed to apply where the contract provides for an alternative mode of performance. It is clear that a more onerous method of performance by itself would not amount to a frustrating event. The same learned author also states that a mere rise in price rendering the contract more expensive to perform does not constitute frustration. (See Para 15-158.)

41. Indeed, in England, in the celebrated Sea Angel case [Edwinton Commercial Corpn. v. Tsavliris Russ (Worldwide Salvage & Towage) Ltd. (The Sea Angel), 2007 EWCA Civ 547 : (2007) 2 Lloyd's Rep 517 (CA)] , the modern approach to frustration is well put, and the same reads as under:

111. In my judgment, the application of the doctrine of frustration requires a multi-factorial approach. Among the factors which have to be considered are the terms of the contract itself, its matrix or context, the parties' knowledge, expectations, assumptions and contemplations, in particular as to risk, as at the time of the contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supervening event, and the parties' reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances. Since the subject-matter of the doctrine of frustration is contract, and contracts are about the allocation of risk, and since the allocation and assumption of risk is not simply a matter of express or implied provision but may also depend on less easily defined matters such as the contemplation of the parties, the application of the doctrine can often be a difficult one. In such circumstances, the test of radically different is important: it tells us that the doctrine is not to be lightly invoked; that mere CS(COMM) 493 of 2020 Page 79 of 132 incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances. (Emphasis supplied) 9.7 At this stage, this Court is only required to prima facie consider the supervening circumstances for application of the doctrine of frustration which requires a multi factorial approach as noted in the decision reported as 2007 EWCL Civ 547 (the Sea Angel's case) and approved by the Supreme Court in Energy Watchdog (supra). In the present suit, case of FRL is of the supervening circumstance that due to the COVID-19 pandemic, the retail sector has taken a big hit and FRL a listed company having public shareholdings besides the shareholders who entered into FCPL SHA, has also been seriously impacted. FRL has a large number of stores all over India with 25000 employees therein and is burdened with loans from banks and financial institutions and is on the verge of collapse, which fact was duly informed to Amazon. FRL thus required more funds to survive, failing which the company will be defaulting entailing serious consequences on the company and its directors. This distressed financial position of FRL is not disputed by Amazon. As a matter of fact, it is Amazon's case that to help FRL out of this position, Amazon was in touch with other entities to infuse funds in FRL. It is the case of FRL that since the directors of FRL stand in fiduciary capacity, they will have to act in the best interest of the company which position of law cannot be disputed in view of Section 166 of the Companies Act, 2013 and decisions noted hereinafter. 9.8 The Companies Act, 2013 which is a special enactment codifies the fiduciary duty of the directors of a company under Section 166 as under: CS(COMM) 493 of 2020 Page 80 of 132

166. Duties of directors (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company. (2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. (3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. 9.9 Supreme Court in AIR 1950 SC 172 Nanalal Zaver & Anr. Vs. Bombay Life Assurance Co. Ltd. & Ors. reiterating the well settled principle that in exercising their powers, whether general or special, the directors, must always bear in mind that they hold a fiduciary position and must exercise their powers for the benefit of the company and for that alone. It was held that the Court can intervene to prevent the abuse of a power, whenever such abuse is held proved, and also cautioned that where directors have a discretion and are bona-fidely acting in the interest of the company, it is not the habit of Court to interfere with the same. It was further held that when a company is in no need of further capital, directors are not entitled to use their power of issuing shares merely for the purpose of maintaining themselves and their friends in management over the affairs of a company, or merely for the purpose of defeating the wishes of the existing majority of the shareholders. It was held:

41. It is well established that directors of a company are in a fiduciary position vis-a-vis the company and must exercise their power for the benefit of the company. If the power to issue further shares is exercised by the directors not for the benefit of the company but simply and solely for their personal aggrandisement and to the detriment of the company, the Court CS(COMM) 493 of 2020 Page 81 of 132 will interfere and prevent the directors from doing so. The very basis of the Court's interference in such a case is the existence of the relationship of a trustee and of cestui que trust as between the directors and the company. 9.10 Following the decision in Nanalal Zaver (supra), this principle of fiduciary duty of the directors of a company was reiterated by the Supreme Court in (1981) 3 SCC 333 Needle Industries Ltd. & Ors. Vs. Needle Industries Newey (India) Holdings Ltd. & Ors. 9.11 Learned Senior Counsel for FRL has relied upon the decision reported as 1959 AC 324, Scottish Co-operative Wholesale Society Ltd. vs. Meyer & Anr. wherein the House of Lords was dealing with the duties of the nominee Directors, in relation to a company formed as a subsidiary to a co-operative wholesale society to enable it to get licenses and participate in the manufacture and sale of rayon materials, the production whereof was controlled till 1952. The two respondents therein were appointed as Joint Managing Directors of the company. It was noted that nominees of a parent company upon the Board of a subsidiary company may be placed in a difficult and delicate position. It is, then, the more incumbent on the parent company to behave with scrupulous fairness to the minority shareholders and to avoid imposing upon their nominees, the alternative of disregarding their instructions or betraying the interests of the minority. It was noted that the society pursued a different course. It acted in oppression and unscrupulously which act was promoted by the action or inaction of the nominee Directors. The company which might had recovered its former prosperity could not do as the Directors thought it had served its purposes and it can conveniently be liquidated. It was held: CS(COMM) 493 of 2020 Page 82 of 132 The short answer is that it was the policy of the society that the affairs of the company should be so conducted and the minority shareholders were content that it should be so. They reliedhow unwisely the event provedupon the good faith of the society, and, in any case, they were impotent to impose their own views. It is just because the society could not only use the ordinary and legitimate weapons of commercial warfare but could also control from within the operations of the company that it is illegitimate to regard the conduct of the company's affairs as a matter for which they had no responsibility. After much consideration of this question, I do not think that my own views could be stated better than in the late Lord President Cooper's words on the first hearing of this case. "In my view," he said, "the section warrants the court in looking at the business "realities of a situation and does not confine them to a narrow "legalistic view. The truth is that, whenever a subsidiary is "formed as in this case with an independent minority of share-"holders, the parent company must, if it is engaged in the same "class of business, accept as a result of having formed such a "subsidiary an obligation so to conduct what are in a sense its "own affairs as to deal fairly with its subsidiary." At the opposite pole to this standard may be put the conduct of a parent company which says: "Our subsidiary company has served its "purpose, which is our purpose. Therefore let it die," and, having thus pronounced sentence, is able to enforce it and does enforce it not only by attack from without but also by support from within. If this section is inept to cover such a case, it will be a dead letter indeed. I have expressed myself strongly in this case because, on the contrary, it appears to me to be a glaring example of precisely the evil which Parliament intended to remedy. Lastly, on the facts, it is to be noted that while the society's directors of the company, who were also directors of the society, knew all that was happening within the society, Dr. Meyer and Mr. Lucas knew nothing apart from what they could infer from the communications, verbal and written, which they had received, with reference to the alignment of the shareholding and the taking over of shares from the petitioners, CS(COMM) 493 of 2020 Page 83 of 132 and the general attitude of the society's directors on the company's board. On the vital matters affecting the company's prosperity known to the nominee directors these directors remained silent, concealed the facts from the petitioners and took no action and gave no advice helpful to the company. As Lord Sorn put it, their conduct as directors was a negative one to "let the company drift towards "the rocks." My Lords, if the society could be regarded as an organization independent of the company and in competition with it, no legal objection could be taken to the actions and policy of the society. Lord Carmont pointed this out in the Court of Session. But that is not the position. In law the society and the company were, it is true, separate legal entities. But they were in the relation of parent and subsidiary companies, the company being formed to run a business for the society which the society could not at the outset have done for itself, unless they could have persuaded Dr. Meyer and Mr. Lucas to become servants of the society. This the petitioners were not prepared to do. The company, through, the knowledge, the experience, the connections, the business ability and the energies of the petitioners, had built up a valuable goodwill in which the society shared and which there is no reason to think would not have been maintained, if not increased, with the co-operation of the society. The company was in substance, though not in law, a partnership consisting of the society, Dr. Meyer and Mr. Lucas. Whatever may be the other different legal consequences following on one or other of these forms of combination one result, in my opinion, followed in the present case from the method adopted, which is common to partnership, that there should be the utmost good faith between the constituent members. In partnership the position is clear. As stated in Lindley on Partnership, 11th ed., p. 401: "A partner cannot, without the consent of his co-"partners lawfully carry on for his own benefit, either openly or "secretly, any business in rivalry with the firm to which he "belongs." It may not be possible for the legal remedies that would follow in the case of a partnership to follow here, but the principle has, I think, valuable application to the circumstances of this case. CS(COMM) 493 of 2020 Page 84 of 132 9.12 In the decision reported as [2009] EWCA Civ 291; [2010] B.C.C. 597 Hawkes vs. Cuddy the Court of Appeals held, the fact that a Director of a company was nominated to that office by a shareholder did not, of itself, impose any duty on the director, owed to his nominator. The director may owe duties to his nominator if he was an employee or officer of the nominator, or by reason of a formal or informal agreement with his nominator. Such duties did not arise out of his nomination, but out of a separate agreement or office. Such duties could not, however, detract from his duty to the company of which he was a director when he was acting as such. An appointed director, without being in breach of his duties to the company, may take the interests of his nominator into account, provided that his decisions as a director were, in what he genuinely considered to be the best interests of the company; but that was a very different thing from his being under a duty to his nominator by reason of his appointment by it. 9.13 In RNRL vs. RIL (supra), Supreme Court reiterated that the Board of Directors has to act in a fiduciary capacity vis-a-vis the shareholders and that this duty has been a part of broader understanding of company law from the time of settlement companies that were the precursors of joint stock companies. Supreme Court deprecating the demand of RNRL that the Board of RIL only act at the behest and as rubber stamp of the decisions of the promoters held, that acceptance of such demands would destroy the fabric of the Company Law itself and the foundation of trust, faith and honest dealing with the shareholders. 9.14 According to Amazon its investment in FCPL was premised on the basis that defendant Nos.3 and 8 in the present suit who were the major shareholders of FCPL were also the Executive Chairman and Managing CS(COMM) 493 of 2020 Page 85 of 132 Director of FRL respectively, exercised control over FRL. However, as noted above defendant Nos. 3 and 8 were also required to perform their fiduciary duty towards FRL even though bound by FCPL SHA and FRL SHA. 9.15 From the documents filed by Amazon it is clear that defendant No.3 (Kishore Biyani) in March, 2020 informed Amazon expressing its fear of Covid-19 disrupting capital markets globally leading to significant deterioration of FRLs market capitalization with the stock falling down per share, leading to a requirement for increased encumbrances of FRLs shares and a shortfall in security in two of their facilities under UBS AG and L & T Finance Ltd. 9.16 Amazon was also asked to step in and nominate lenders of financial institutions (replacement financial institutions) to avoid alienation or disposal of FRLs shares held by the promoter groups. Considering the down turn in the market in April and May, 2020 several of FRLs lenders began recalling their facilities. From the documentation it is clear that the grim situation of FRL was duly notified to Amazon and though Amazon through its various options including from SAMARA was trying to negotiate however, nothing concrete resulted. It is in this peculiar circumstance and the fact, as the shares of FRL fell down with investors recalling their securities, it was essential for FRL to act, to survive. This is thus a case of supervening circumstance and as noted by the Supreme Court in Energy Watchdogs decision (supra) a multi-factorial approach should be adopted and the acts of both FRL and Amazon have to be tested on the said anvil. CS(COMM) 493 of 2020 Page 86 of 132 9.17 Though the claim of Amazon in the representation to statutory authorities regarding the transaction is that the same is in breach of FCPL SHA and FRL SHA and the resolution dated 29th August, 2020 passed by the Board of Directors of FRL is void, however, no material has been placed on record by the FRL to show that the resolution dated 29th August, 2020 passed by the Board of Directors of FRL is void or contrary to any statutory provision. Case of FRL is that its Board Resolution dated 29th August, 2020 does not violate any provision of the FRL's Article of Association or any provision of law and that the same is in compliance with the fiduciary duty owed by FRL to its stakeholder, which averments have not been seriously disputed by Amazon except contending that the Board Resolution dated 29th August, 2020 is in breach of FCPL SHA and FRL SHA. The resolution being in breach of the FRL SHA and FCPL SHA is distinct from the resolution being void or contrary to any statutory provision or contrary to the Articles of Association of FRL. Further contention of Amazon is that the Board Resolution dated 29th August, 2020 of FRL is in contravention with FCPL's Article of Association. However, FRL is bound by its Article of Association and not that of FCPL's. 9.18 To claim that the Board Resolution of FRL dated 29th August, 2020 is void, Amazon also contends that consent of FCPL as required under the FRL SHA has not been taken in this regard. However, FRL has placed on record the letter dated 29th August, 2020, signed on behalf of both FRL and FCPL wherein FCPL has granted its approval for the transaction between FRL and Reliance. During the course of arguments, learned counsel for FRL contested the letter dated 29th August, 2020 claiming that the same is not accompanied by a statement of truth based on affidavit, however, as CS(COMM) 493 of 2020 Page 87 of 132 noted in the preceding paras, since arguments in the application have been heard finally at the ad interim stage, both parties have filed documents without filling the necessary affidavits, which the parties will be required to in the suit, while completing the pleadings. 9.19 In view of the discussion above, this Court is of the opinion that the Board Resolution dated 29th August, 2020 of FRL is prima facie neither void nor contrary to any statutory provision nor the Articles of Association of FRL. Whether conflation of the FRL SHA, FCPL SHA and FCPL SSA amounts to 'Control' of Amazon on FRL 10.1 The third ground on which FRL claims that Amazon is unlawfully interfering in the transaction is that by conflating the FCPL SHA and FRL SHA, Amazon seeks to control the affairs of FRL which is impermissible as at best it is a shareholder of FCPL and any rights vis--vis that of a shareholder of FCPL vests in Amazon and in the said garb it cannot exercise control over FRL. Further the 'control' exercised by Amazon amounts to violation of FEMA FDI Rules. Relying upon the decision reported as 2019 (2) SCC 1 Arcelormittal India Pvt. Ltd. vs. Satish Kumar Gupta & Ors., learned Senior Counsel for Amazon contends that Amazon does not have right to appoint the majority Directors of FCPL and the rights granted to Amazon under FCPL SHA are merely protective rights that do not relate in any manner to the day-to-day management and operation of FCPL or FRL. This is exactly the dichotomy of which FRL is aggrieved of. According to FRL, though Amazon claims that in terms of FCPL SHA the rights, if any, with Amazon are protective rights for its investments with no interference in CS(COMM) 493 of 2020 Page 88 of 132 day-to-day management and operations of FCPL or FRL, however, on conflation of the FCPL SHA and FRL SHA, Amazon has complete control over the functioning of FRL. 10.2 According to Amazon, the FRL SHA, FCPL SHA and the FCPL SSA being a single integrated transaction do not violate the foreign exchange laws of India. It is stated that FRL is a part of Future Group of Companies, defendant No.3 is the Executive Chairman of FRL and defendant No.8 is the Managing Director of FRL and they continue to hold the powers of management of the affairs of FRL. Further the Biyanis excluding FCPL are collectively the single largest shareholders of FRL with fragmented public shareholding and therefore, in de-facto control of FRL. According to Amazon as per FEMA FDI Rules, foreign investment upto 51% under the government route is permitted in entities engaged in multi-brand retail trading, subject to other attendant conditions under the rules. Further as per para-15.1, Schedule-I of FEMA FDI Rules, foreign investments upto 100% is permitted under the automatic route in FCPL which is engaged in cash and carry wholesale trading/wholesale trading. By the various agreements Amazon has only created protective rights for its investments in FCPL amounting to 49% of shareholding of FCPL which holds less than 10% shares in FRL. Thus even by the downstream investment Amazon has less than 5% investment in FRL. Since the investment in FRL is not by Amazon but by FCPL which is an Indian entity, it cannot be considered an indirect foreign investment as the investment flows from an entity which is Indian owned and controlled. It is the specific case of Amazon that it neither owns nor controls FCPL much less FRL. Amazon further relies upon the illustration in the FDI Policy, 2017 which reads as under: CS(COMM) 493 of 2020 Page 89 of 132

(ii) Counting of indirect foreign investment (a) The foreign investment through the investing Indian company/LLP would not be considered for calculation of the indirect foreign investment in case of Indian companies/LLPs which are owned and controlled by resident Indian citizens and/or Indian Companies/LLPs which are owned and controlled by resident Indian citizens. To illustrate, if the indirect foreign investment is being calculated for Company X which has investment through an investing Company Y having foreign investment, the following would be the method of calculation: (A) where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y. 10.3 Provisions of FEMA FDI Rules relevant to the contentions of the parties and relied upon by FRL are as under: "2(r) FDI or Foreign Direct Investment means investment through equity instruments by a person resident outside India in an unlisted Indian company; or in ten per cent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company;

2 (t) foreign portfolio investment means any investment made by a person resident outside India through equity instruments where such investment is less than ten per cent of the post issue paid-up share capital on a fully diluted basis of a listed Indian company or less than ten per cent of the paid-up value of each series of equity instrument of a listed Indian company; 2(u) FPI or Foreign Portfolio Investor means a person registered in accordance with the provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014

3. Restriction on investment in India by a person resident outside India.- Save as otherwise provided in the Act or rules or regulations CS(COMM) 493 of 2020 Page 90 of 132 made thereunder, no person resident outside India shall make any investment in India : Provided that an investment made in accordance with the Act or the rules or the regulations made thereunder and held on the date of commencement of these rules shall be deemed to have been made under these rules and shall accordingly be governed by these rules: Provided further that the Reserve Bank may, on an application made to it and for sufficient reasons and in consultation with the Central Government, permit a person resident outside India to make any investment in India subject to such conditions as may be considered necessary. xx xx xx

6. Investments by person resident outside India: - A person resident outside India may make investment as under:- (a) may subscribe, purchase or sell equity instruments of an Indian company in the manner and subject to the terms and conditions specified in Schedule I: Provided that a person who is a citizen of Bangladesh or Pakistan or is an entity incorporated in Bangladesh or Pakistan cannot purchase equity instruments without the prior government approval: Provided further that a citizen of Pakistan or an entity incorporated in Pakistan cannot invest in defence, space, atomic energy and sectors or activities prohibited for foreign investment even through the government route. Note: Issue or transfer of participating interest or right in oil fields by Indian companies to a person resident outside India would be treated as foreign investment and shall comply with the conditions laid down in Schedule I. (b) A person resident outside India, other than a citizen of Bangladesh or Pakistan or an entity incorporated in Bangladesh or Pakistan, may invest either by way of capital contribution or by way of acquisition or transfer of profit shares of an LLP, in the manner and subject to the terms and conditions specified in Schedule VI. (c) A person resident outside India, other than a citizen of Bangladesh or Pakistan or an entity incorporated in Bangladesh or Pakistan, may invest in units of an investment vehicle, in the manner and subject to the terms and conditions specified in Schedule VIII. CS(COMM) 493 of 2020 Page 91 of 132 (d) A person resident outside India may invest in the depository receipts (DRs) issued by foreign depositories against eligible securities in the manner and subject to the terms and conditions specified in Schedule IX. xx xx xx

10. Investment by FPI - A FPI may make investments as under:- (1) A FPI may purchase or sell equity instruments of an Indian company which is listed or to be listed on a recognised stock exchange in India, and/or may purchase or sell securities other than equity instruments, in the manner and subject to the terms and conditions specified in Schedule II. Note - A FPI may trade or invest in all exchange traded derivative contracts approved by Securities and Exchange Board of India from time to time subject to the limits specified by the Securities and Exchange Board of India and the conditions prescribed in Schedule (2) A FPI may purchase, hold, or sell Indian Depository Receipts (IDRs) of companies resident outside India and issued in the Indian capital market, in the manner and subject to the terms and conditions as prescribed in Schedule X. xxx xxx xxx

23. Downstream investment - (1) Indian entity which has received indirect foreign investment shall comply with the entry route, sectoral caps, pricing guidelines and other attendant conditions as applicable for foreign investment. Explanation: Downstream investment by an LLP not owned and not controlled by resident Indian citizens or owned or controlled by persons resident outside India is allowed in an Indian company operating in sectors where foreign investment up to one hundred percent is permitted under automatic route and there are no FDI linked performance conditions. xx xx xx Explanation.- For the purposes of this rule,- (a) ownership of an Indian company shall mean beneficial holding of more than fifty percent of the equity instruments of such company and ownership of an LLP shall mean contribution of more than fifty percent in its capital and having majority profit share; CS(COMM) 493 of 2020 Page 92 of 132 (b) company owned by resident Indian citizens shall mean an Indian company where ownership is vested in resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens and LLP owned by resident Indian citizens shall mean an LLP where ownership is vested in resident Indian citizens and/ or Indian entities, which are ultimately owned and controlled by resident Indian citizens; (c) company owned by persons resident outside India shall mean an Indian company that is owned by persons resident outside India and LLP owned by persons resident outside India shall mean an LLP that is owned by persons resident outside India; (d) control shall mean the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreement or voting agreement and for the purpose of LLP, control shall mean the right to appoint majority of the designated partners, where such designated partners, with specific exclusion to others, have control over all the policies of an LLP; (e) company controlled by resident Indian citizens means an Indian company, the control of which is vested in resident Indian citizens and/ or Indian companies which are ultimately owned and controlled by resident Indian citizens and LLP controlled by resident Indian citizens shall mean an LLP, the control of which is vested in resident Indian citizens and/ or Indian entities, which are ultimately owned and controlled by resident Indian citizens; (f) xx xx xx; (g) xx xx xx

(i) indirect foreign investment means downstream investment received by an Indian entity from,- (A) another Indian entity (IE) which has received foreign investment and (i) the IE is not owned and not controlled by resident Indian citizens or (ii) is owned or controlled by persons resident outside India; or CS(COMM) 493 of 2020 Page 93 of 132 (B) an investment vehicle whose sponsor or manager or investment manager (i) is not owned and not controlled by resident Indian citizens or (ii) is owned or controlled by persons resident outside India : Provided that no person resident in India other than an Indian entity can receive Indirect Foreign Investment; (j) total foreign investment means the total of foreign investment and indirect foreign investment and the same will be reckoned on a fully diluted basis" 10.4 Additional condition under the FDI Policy Circular of 2017: b. In any sector/activity, where Government approval is required for foreign investment and in cases where there are any inter-se agreements between/amongst shareholders which have an effect on the appointment of the Board of Directors or on the exercise of voting rights or of creating voting rights disproportionate to shareholding or any incidental matter thereof, such agreements will have to be informed to the approving authority. The approving authority will consider such interse agreements for determining ownership and control when considering the case for approval of foreign investment. 10.5 Para-3 of Schedule-I of FEMA FDI Rules, reads as under: (3) Permitted sectors, entry routes and sectoral caps for total foreign investment Unless otherwise specified in these Rules or the Schedules, the entry routes and sectoral caps for the total foreign investment in an Indian entity shall be as follows, namely:-

(i) automatic route means the entry route through which investment by a person resident outside India does not require the prior approval of the Reserve Bank or the Central Government;

(ii) government route means the entry route through which investment by a person resident outside India requires prior Government approval and foreign investment received under this route shall be in accordance with the conditions stipulated by the Government in its approval; CS(COMM) 493 of 2020 Page 94 of 132

(iii) Aggregate foreign portfolio investment up to forty-nine percent of the paid-up capital on a fully diluted basis or the sectoral or statutory cap, whichever is lower, shall not require Government approval or compliance of sectoral conditions as the case may be, if such investment does not result in transfer of ownership and control of the resident Indian company from resident Indian citizens or transfer of ownership or control to persons resident outside India and other investments by a person resident outside India shall be subject to the conditions of Government approval and compliance of sectoral conditions as laid down in these rules. 10.6 The decision of this Court reported as 2017 SCC OnLine Del. 7810 Cruz City 1 Mauritius Holdings vs. Unitech Limited relied upon by Amazon does not support its case as the said judgment does not permit violation of the foreign exchange law. The decision held that the foreign award could not be set aside merely on the ground that the enforcement of the foreign award required remittance in the form of foreign exchange for which necessary approvals could be taken from the RBI. 10.7 Before this Court case of Amazon is that FRL SHA, FCPL SHA and FCPL SSA are a single integrated transaction and Amazon entered into the transaction based on two broad sets of special and protective rights as per the three agreements; the first set of rights being that the retail assets of FRL would not be alienated without the prior consent of Amazon, never to a restricted person mentioned in the Schedule and that Biyanis had agreed that FRL would remain the sole vehicle for conduct of the retail business. The second set of rights that were granted in favour of Amazon by the three agreements as a single integrated transaction was that, if the Indian laws permitted Amazon could become the single largest shareholder of FRL and CS(COMM) 493 of 2020 Page 95 of 132 in this regard, the Biyanis agreed to maintain the minimum shareholdings of 16.18% free from encumbrances. 10.8 On the date of notification of FRL SHA, that is, 26 December, 2019, only 16.18% FRL securities were free from encumbrances and as per Clause-17.2(i) of the FCPL SHA, the promoters were under an obligation to reserve the said minimum shareholding. 10.9 'Control' is defined in the Companies Act, 2013 under Section 2(27) "2 In this Act, unless the context otherwise requires, "control" shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner" 10.10 Similar definition of 'control' is provided under the Insolvency and Bankruptcy Code 2016, SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, Insurance Laws (Amendment) Act, 2015 and Explanation to Rule 23 FEMA FDI Rules. 10.11 In Arcelormittal (supra), Supreme Court dealing with the meaning of expression management and control under the Insolvency and Bankruptcy Code held that the expression management would refer to the de-jure management of a corporate debtor and the expression control denotes any positive control, which means that the mere power to block special resolution of a company cannot amount to control and as contrasted with management, means de-facto control of actual management or policy decisions that can be or are in fact taken. It was held: CS(COMM) 493 of 2020 Page 96 of 132

49. The expression control is defined in Section 2(27) of the Companies Act, 2013 as follows:

2. (27) control shall include the right to appoint majority of the Directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner;

50. The expression control is therefore defined in two parts. The first part refers to de jure control, which includes the right to appoint a majority of the Directors of a company. The second part refers to de facto control. So long as a person or persons acting in concert, directly or indirectly, can positively influence, in any manner, management or policy decisions, they could be said to be in control. A management decision is a decision to be taken as to how the corporate body is to be run in its day-to-day affairs. A policy decision would be a decision that would be beyond running day-to-day affairs i.e. long-term decisions. So long as management or policy decisions can be, or are in fact, taken by virtue of shareholding, management rights, shareholders agreements, voting agreements or otherwise, control can be said to exist.

51. Thus, the expression control, in Section 29-A(c), denotes only positive control, which means that the mere power to block special resolutions of a company cannot amount to control. Control here, as contrasted with management, means de facto control of actual management or policy decisions that can be or are in fact taken. A judgment of the Securities Appellate Tribunal in Subhkam Ventures (I) (P) Ltd. v. SEBI [Subhkam Ventures (I) (P) Ltd. v. SEBI, 2010 SCC OnLine SAT 35], made the following observations qua control under the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, wherein control is defined in Regulation 2(1)(e) in similar terms as in Section 2(27) of the Companies Act, 2013. The Securities Appellate Tribunal held: (SCC OnLine SAT para 6)

6. The term control has been defined in Regulation CS(COMM) 493 of 2020 Page 97 of 132 2(1)(c) of the Takeover Code to include the right to appoint majority of the Directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner. This definition is an inclusive one and not exhaustive and it has two distinct and separate features: (i) the right to appoint majority of Directors or, (ii) the ability to control the management or policy decisions by various means referred to in the definition. This control of management or policy decisions could be by virtue of shareholding or management rights or shareholders agreement or voting agreements or in any other manner. This definition appears to be similar to the one as given in Black's Law Dictionary (Eighth Edn.) at p. 353 where this term has been defined as under: ControlThe direct or indirect power to direct the management and policies of a person or entity, whether through ownership of voting securities, by contract, or otherwise; the power or authority to manage, direct, or oversee. Control, according to the definition, is a proactive and not a reactive power. It is a power by which an acquirer can command the target company to do what he wants it to do. Control really means creating or controlling a situation by taking the initiative. Power by which an acquirer can only prevent a company from doing what the latter wants to do is by itself not control. In that event, the acquirer is only reacting rather than taking the initiative. It is a positive power and not a negative power. In a board managed company, it is the board of Directors that is in control. If an acquirer were to have power to appoint majority of Directors, it is obvious that he would be in control of the company but that is not the only way to be in control. If an acquirer were to control the management or policy decisions of a company, he would be in control. This could happen by virtue of his shareholding or management rights CS(COMM) 493 of 2020 Page 98 of 132 or by reason of shareholders agreements or voting agreements or in any other manner. The test really is whether the acquirer is in the driving seat. To extend the metaphor further, the question would be whether he controls the steering, accelerator, the gears and the brakes. If the answer to these questions is in the affirmative, then alone would he be in control of the company. In other words, the question to be asked in each case would be whether the acquirer is the driving force behind the company and whether he is the one providing motion to the organization. If yes, he is in control but not otherwise. In short control means effective control. (Emphasis supplied) 10.12 In the decision reported as 2000 (3) Mh.L.J 700 Rolta India Ltd., Mumbai & Anr. vs. Venure Industries Ltd. Haryana & Ors. the Division Bench of the Bombay High Court dealing with the pooling agreement between two or more shareholders held that by such an agreement shareholders bind one another to vote as they mutually agree. These agreements are enforceable because the right to vote is a proprietary right which right to vote may be aided and effectuated by a contract. It was also held that a pooling agreement may be utilized in connection with an election of Directors and shareholders resolution where shareholders have a right to vote however, a pooling agreement cannot be used to supersede the statutory right given to the Board of Directors to manage the company, the underlying reason being the shareholders cannot achieve by pooling agreement that what is prohibited to them if they are voting individually. It was held:

22. A pooling agreement may be utilised in connection with the election of Directors and shareholders' Resolutions where shareholders have a right to vote. However, a pooling agreement cannot be used to supersede the statutory rights given to the Board of Directors to manage the company, the underlying reason being that the shareholders cannot achieve CS(COMM) 493 of 2020 Page 99 of 132 by pooling agreement that which is prohibited to them, if they are voting individually. Therefore, the power of shareholders to unite is not extended to contracts, whereby restrictions are placed on the powers of Directors to manage the business of the Corporation. It is for this reason that a pooling agreement cannot be between Directors regarding their powers as Directors. There is vast difference in principle between the case of a shareholder binding himself by such a contract and the Director of the Company undertaking such an obligation by compromising his fiduciary status. The shareholder is dealing with his own property. He is entitled to consider his own interests, without regard to interests of other shareholders. However, Directors are fiduciaries of the Company and the shareholders. It is their duty to do what they consider best in the interests of the Company. They cannot abdicate their independent judgment by entering into pooling agreements. The Company works through two main organs, viz. the shareholders and the Board of Directors. (Emphasis Supplied) 10.13 Therefore, 'control' includes the right to appoint majority of Directors, the right to control management and the right to control the policy decision. Such rights can be exercised individually or collectively, directly or indirectly by shareholdings management rights, shareholders agreements, voting agreements etc. Such control based on the rights accruing through the shareholding/voting rights may be easily determinable however, when the same are through agreements assessments of such rights often becomes complex due to the camouflage of the language used. Though the basic principle governing the field is that veto rights not amounting to acquisition of control may be protective in nature rather than participative, that is, that such rights are vested in the investor to protect his investment or prevent dilution of his shareholding however, there is a thin line between these rights being confined to veto rights which are protective in nature and the veto CS(COMM) 493 of 2020 Page 100 of 132 rights transgressing to acquisition of control on the company, the later being subject to FEMA FDI Rules. Thus to determine whether the rights conferred on Amazon under the FCPL SHA and the FRL SHA, amount to control over FRL would be a question to be determined on analysis of the various clauses of the agreement and can be determined only after the parties have completed their necessary pleadings and documents showing the underlined intention or by the competent fact finding authority. At this stage, this Court is only forming a prima facie opinion thereon based on the clauses of the FCPL SHA and FRL SHA. 10.14 Relevant Clauses of FCPL SHA read as under:

4. COMMITMENT OF THE PARTIES 4.1. The Promoters hereby agree, covenant and undertake:

(i) to perform and observe and also cause the Company to perform all of the provisions of this Agreement and the Organizational Documents;

(ii) that in their capacity as Shareholders they will exercise any power to vote or cause the power to vote to be exercised, at any meeting of the Shareholders of the Company so as to enable the approval of any and every resolution of the Company necessary or desirable to give full effect to this Agreement and the FRL SHA and likewise so as to ensure that no resolution of the Company is passed which is not in accordance with this Agreement and, or, the FRL SHA;

(iii) that they will cause any Person appointed by them as their nominee Director on the Board to exercise any power to vote or cause the power to vote to be exercised, at any meeting of the Board of the Company (or any committee thereof) so as to enable the approval of any and every resolution necessary or desirable to give full effect to this Agreement and the FRL SHA, and likewise so as to ensure that no resolution is passed which is not CS(COMM) 493 of 2020 Page 101 of 132 in accordance with this Agreement and, or, the FRL SHA;

(iv) that they will exercise any power to vote or cause the power to vote, on behalf of themselves and the Company, to be exercised, at any meeting of the shareholders of the Material Entities so as to enable the approval of any and every resolution necessary or desirable to give full effect to this Agreement and the FRL SHA, and the likewise so as to ensure that no resolution of any Material Entity is passed which is not in accordance with this Agreement and, or, the FRL SHA, as the case may be; and

(v) to cause its Affiliates, to comply with the provisions of paragraph (i), paragraph (ii), paragraph (iii), and paragraph (iv) of this Section 4.1. xx xx xx 8.1. Notwithstanding anything contained in this Agreement, the Promoters and the Company hereby agree, covenant and undertake that the matters set out in Schedule IX (Investor Protective Matters) (Investor Protective Matters) shall not be taken-up, decided, acted upon or implemented by the Company; nor the Investor Protective matter be placed for a vote thereon at a Shareholders meeting of the Company; nor any decision be taken by the Shareholders or Board or any committee of the Board; nor the Company be bound/committed to any resolutions/transactions pertaining to the Investor Protective matters, unless the Investor Protective Matter has been, first approved in the affirmative, in writing, by the Investor. Without limiting the generality of the foregoing, in the event that the Company proposes to take up, or decide any Investor Protective matters, in (a) any meeting of the Board, or any committee thereof, such matter shall be taken-up only if the written consent of the Investor has been obtained prior to such meeting, or if at least 1(one) Investor Nominee Director is present in such meeting, and such Investor Nominee Director votes in favour of such matter, or (b) any meeting of the Shareholders of the Company, such matter shall be CS(COMM) 493 of 2020 Page 102 of 132 taken-up only if the written consent of the Investor has been obtained prior to such meeting, or if an authorized representative of the Investor is present in such meeting, and such representative votes in favor of such matter. xx xx xx

10. 1 Ownership and Control of the Promoters and Promoter Affiliates. 10.1.1.The Promoters hereby agree, covenant and undertake that they shall, and shall undertake and ensure that, any promoter Affiliate, holding Company Securities (in accordance with this Agreement) shall, at all times till it holds any Company Securities, (i) (if it is a body corporate) be wholly Controlled, to the exclusion of others, by the Ultimate Controlling Person, and his Immediate Relative, and the Ultimate Controlling Person and his Immediate Relative shall hold (directly and or indirectly) at least 76% (seventy six percent) of the legal and beneficial ownership and voting interests, on a fully diluted basis of such Promoter and, or, Promoter Affiliate; (ii) (if it is a body corporate), undertake and ensure that no Restricted Person shall hold any ownership interest, voting interests or share capital or Control in, or over such Promoter, or such Promoter Affiliates, and (iii) qualify as a resident Indian citizen as defined under the FEMA Regulations, and where such Promoter or such Promoter Affiliate is a Person other than a natural Person, it shall be ultimately owned and Controlled by Persons who are resident Indian citizens under the FEMA Regulations. 10.1.2.It is hereby agreed that the provisions of Section 10.1.1(ii) shall apply mutatis mutandis to any Person (not being a natural Person) which holds securities, ownership or voting interests, whether directly, and, or indirectly in the Promoters which hold Company Securities, or Promoter Affiliates which hold Company Securities. The Promoters shall cause and ensure compliance by such Person as referred to in this Section 10.1.2 with Section 10.1.1(ii). CS(COMM) 493 of 2020 Page 103 of 132 10.2. Restrictions on Transfer 10.2.1.Except where the prior written consent of the Investor has been obtained in accordance with Section 8 (Investor Protective Matters and Investor Protective Notice Matters) or Section 10.2.2, or as expressly permitted by this Agreement in Section 10.3 (Transfer to Promoter Affiliates and Promoter Trust), Section 10.4 (Transfer by the Investor), Section 11 (Exit of the Investor) and Section 15 (FRL Call Option and Associated matters), the Shareholders agree, covenant and undertake that no Shareholder shall Transfer, or Encumber any Company Securities to another Person, without the prior written consent of the other Shareholder, which consent may be provided or withheld in such Shareholders sole and absolute discretion. xx xx xx 13.1 Consent of the investor, and the Promoters. 13.1.1.Notwithstanding anything to the contrary contained in this Agreement, the Parties hereby agree, covenant and undertake that the Promoters and the Company shall, and shall cause a Material Entity to, not (i) take-up, decide, act upon or implement the matters set out in the FRL SHA which require the consent of the Company, or

(ii) place such matters for a vote thereon at the board of shareholders meeting of the material Entity, or (iii) take any decision or cause any decision to be taken by the shareholders or the board or any committee of the board of the Material Entity on such matters, or (iv) be bound/committed to any resolutions/transactions pertaining to such matters; unless a prior written consent of the Investor and the Promoters has been obtained by the Company; provided however, that for a matter which pertain to issuance of Securities by a Material Entity and where the Company intends to or proposes to decline, or recuse itself from participating in such issuance, or not subscribing to its entire pro-rata entitlement required to maintain the Companys shareholding in the Material Entity (on a fully diluted basis) as on the date CS(COMM) 493 of 2020 Page 104 of 132 immediately prior to such issuance by the Material Entity, a written consent shall be required to be obtained only from the Investor prior to the Company declining, recusing itself, or not subscribing to its pro-rata entitlement in the Material Entity. 13.1.2.The Company and the Promoters agree, covenant and undertake that any updates to the list of Restricted Persons and its communication to FRL under FRL SHA shall be undertaken only after a prior written consent of the Investor has been obtained. 13.1.3.The Company and the Promoters agree, covenant and undertake that any assignment of the rights and obligations of the Company or the Promoters under the FRL SHA shall be undertaken only after a prior written consent of the Investor has been obtained. 13.2. FRL SHA 13.2.1.The Promoters and the Company agree, covenant and undertake to comply with the provisions of the FRL SHA at all times. If any provision of the FRL SHA is breached or likely to be breached (FRL SHA Breach), the Promoters and the Company shall be obligated to undertake all actions necessary to ensure that such a breach is duly addressed and, or rectified and the rights and, or, interests of the Company under the FRL SHA are not violated and shall promptly, notify the Investor in writing in relation to such FRL SHA Breach. 13.2.2.Upon the occurrence of a FRL SHA Breach, the Company, and, or, the Promoters shall promptly issue a notice to the Investor, specifying in such notice, details with respect to the FRL SHA Breach, and the remedial actions proposed to be undertaken by the parties thereto. Without prejudice to the foregoing, the Investor shall have the right to issue a written notice to the Company specifying the details of the FRL SHA Breach to the extent the details of the breach are available with it, along with the remedial measures and steps that it is of the opinion that the Company should undertake in CS(COMM) 493 of 2020 Page 105 of 132 respect of such FRL SHA Breach to enforce and protect the rights of the Company (the notice issued by the Investor pursuant to this Section 13.2 (FRL SHA) hereinafter, the FRL SHA Breach Notice) 13.2.3.Within 10 (ten) days of receipt of the FRL SHA Breach Notice, the Company shall and the Promoters shall cause the Company to take all such actions as may be necessary and, or, as may be suggested by the Investor under the FRL SHA Breach Notice for rectifying the concerned breach of the FRL SHA and ensuring that the terms of the FRL SHA are strictly complied with. 13.2.4.In the event the Company and, or, the promoters fail to take appropriate and adequate steps and actions to protect and enforce the rights and entitlements of the Company under the FRL SHA and the applicable Laws, pursuant to such FRL SHA Breach, within a period of 15 (fifteen) Business Days or such other extended period as may be approved in writing by the Investor, or in the event the Promoters and the Company fail to get the FRL SHA Breach rectified or abandon the conduct of the remedial measures initiated, at any point in time, for rectification or resolution of the FRL SHA Breach, to the satisfaction of the Investor, the Company and the Promoters agree and acknowledge that the Investor shall be deemed to be the Companys duly appointed attorney with the full power, rights and authority to take such actions and steps as it deems fit on behalf of the Company and in the name of the Company in order to protect and enforce the rights, entitlements and interests of the Company. In this regard, the Company hereby grants the authority and the power to the Investor and its advisors, authorized representatives, officers and agents, to act as the legal representative/nominee/attorney of the Company and exercise, as the Investor deems fit on behalf of the Company, all such rights and powers that may be available to the Company under the FRL SHA and as a shareholder of FRL, including but not limited to the right to vote, attend shareholders meetings (for and CS(COMM) 493 of 2020 Page 106 of 132 on behalf of the Company), initiate any legal proceedings against FRL and, or, the Promoters, for the purposes of ensuring that the FRL SHA is strictly complied with and the Companys rights under the FRL SHA are adequately safeguarded. 13.2.5.The company and the Promoters hereby agree that any action or decision that may be undertaken pursuant to Section 13.2 (FRL SHA) above is being undertaken in the best interest of the Company and to safeguard rights and entitlements of the Company. 10.15 Relevant Clauses of FRL SHA read as under:- 4.1. The Existing Shareholders hereby agree, covenant, and undertake:

(i) To perform and observe all of the provisions of this Agreement, the Memorandum of Association, and the Articles of Association.

(ii) To ensure and procure that every Person for the time being representing it in its capacity as a Shareholder will exercise any power to vote or cause the power to vote to be exercised, at any meeting of the Shareholders so as to enable the approval of any and every resolution necessary or desirable to give full effect to this Agreement, and likewise so as to ensure that no resolution is passed which is not in accordance with this Agreement; and

(iii) To cause its Affiliates, to comply with the provisions of paragraph (i) and (ii) of this Section 4.1. xx xx xx

6. TRANSFER OF SECURITIES. 6.1. Ownership and Control of the Existing Shareholders and Existing Shareholder Affiliates. 6.1.1. The Existing Shareholders hereby represent and warrant that the shareholding/ownership pattern of the Existing Shareholders listed in Part B of Schedule I (Existing Shareholders) as on the Execution Date is, and as on the Effective Date shall be, as set forth in Schedule V (Shareholding Patten of Existing Shareholders) and that as on CS(COMM) 493 of 2020 Page 107 of 132 the Execution Date, and the Effective Date, the Ultimate Controlling Person wholly owns and shall own, directly and through his Immediate Relatives, and Controls, and shall Control, each of the Existing Shareholders listed in Part B of Schedule I (Existing Shareholders). 6.1.2. Each Existing Shareholder (including any Existing Shareholder and, or, Existing Shareholder Trust) which acquires Securities pursuant to Section 6.2.4 (Transfer to Affiliates) hereof, or any Affiliate or person forming part of the Promoter Group (as defined in the SEBI (ICDR) Regulations) of the Company who acquires further Securities of the Company (and each such Person, the "Existing Shareholder Affiliate"), which is a body corporate, hereby agrees, covenants, and undertakes that as long as it holds any Securities of the Company, the Ultimate Controlling Person and his Immediate Relatives, shall Control such Existing Shareholder, Existing Shareholder Trust or Existing Shareholder Affiliate (to the exclusion of other Persons), and own and hold at least 76% (seventy six percent) of the legal and beneficial ownership (and voting interests) on a fully diluted basis of such Existing Shareholder, Existing Shareholder Trust and, or Existing Shareholder Affiliate. 6.2. Restrictions on Transfer of or Encumbrances over Existing Shareholder Securities. 6.2.1. Each of the Existing Shareholders hereby covenant, undertake and agree that it shall not, and shall ensure that the Existing Shareholder Affiliates shall not and FCL hereby agrees, covenants, and undertakes that it shall not, Transfer or Encumber any of the Securities of the Company held by it to any Person or create any Encumbrance over the Securities of the Company held by it except pursuant to mutual written consent of FCL and the Existing Shareholders. All Transfer of Securities permitted by this Agreement may only be made in compliance with requirements of Law. 6.2.2. Encumbrances over Existing Shareholder Securities: In the event there is a breach, or event of default, or any CS(COMM) 493 of 2020 Page 108 of 132 other event or occurrence, under any agreement, or arrangement relating to any loan, and, or debt taken or raised by the Company with a Lender whereby the Lender makes or is entitled to make a claim of any interests over the Existing Shareholders Securities (such event, the Existing Shareholders Event of Default" ), including any right of alienation, disposal etc., the Existing Shareholders shall immediately, and no later than 1(one) day from the occurrence of such event, notify FCL, in writing, of such event and in such case, the Company shall, if requested by the Existing Shareholders, and the FCL, undertake all such actions as may be required to replace the Lenders of the Company with such other Persons as may be nominated by the Existing Shareholders, and FCL. 6.2.3. The Company shall not assume any share transfer restrictions (including without limitation any lock-in, right of first refusal, right of first offer, tag-along rights) on the Existing Shareholder Securities in favour of any Person, without the prior consent in writing of FCL (which consent may be provided, or denied by FCL, in its sole and absolute discretion). Any request for FCL's consent pursuant to this Section 6.2.3 by the Company shall be made in writing and shall be accompanied with adequate details of the exact nature of rights proposed to be granted, the third party to whom the rights are proposed to be granted, the tenure of these rights, and true and accurate copies of any agreements proposed to be executed with such third party. 6.2.4. Transfer to Affiliates.

(i) Notwithstanding anything to the contrary contained in this Agreement, any Existing Shareholder may Transfer Existing Shareholder Securities: (a) to its Affiliate (provided such Affiliate satisfies the requirement of Section 6.1 (Ownership and Control of the Existing Shareholders and Existing Shareholder Affiliates) and the Existing CS(COMM) 493 of 2020 Page 109 of 132 Shareholder has obtained an executed Deed of Adherence from such Affiliate, and delivered the same to the Company and FCL) or to another Existing Shareholder; or (b) to a trust whose only trustees and only ultimate beneficiaries are such Existing Shareholder's Immediate Relatives, and if such Existing Shareholder is not a natural Person, then to a trust whose only trustees and only ultimate beneficiaries are the Ultimate Controlling Person, or his Immediate Relatives ("Existing Shareholder Trust''), as part of a bona fide succession-planning exercise, provided that the Existing Shareholders have obtained an executed Deed of Adherence from such trust, and its trustees, and delivered the same to the Company and FCL; or

(ii) If, after any Transfer pursuant to Section 6.2.4(i)(a), or Section 6.2.4( i)(b), the applicable Affiliate ceases to be an Affiliate (or ceases to satisfy the requirement of Section 6.1). or the trust ceases to be Existing Shareholder Trust, then the Existing Shareholder that made the Transfer (the "Transferring Party") shall, procure that such Person shall immediately Transfer such Existing Shareholder Securities to the Transferring Party or to another Affiliate, or Existing Shareholder Trust of the Transferring Party in accordance with the terms of this Section 6.2.4 and the Transferring Party shall immediately give notice to the Company, and FCL that such Transfer has occurred. xx xx xx

9. RESERVED MATTERS AND OTHER MATTERS. 9.1. Notwithstanding anything to the contrary, the Existing Shareholders, and the Company hereby agree and undertake that the matters set forth below shall not be taken-up, decided, acted upon or implemented by the Company ("Reserved Matters"); nor the Reserved CS(COMM) 493 of 2020 Page 110 of 132 Matters be placed for a vote thereon at a Shareholders' meeting of the Company; nor any decision be taken by the Shareholders or Board or any committee of the Board; nor the Company be bound/ committed to any resolutions/ transactions pertaining to the Reserved Matters, unless the Reserved Matter has been, first approved in the affirmative, in writing, by FCL. Without limiting the generality of the foregoing, in the event that the Company proposes to take up, or decide any Reserved Matters, in (a) any meeting of the Board, or any committee thereof, such matter shall be taken up only if the written consent of FCL has been obtained prior to such meeting, or (b) any meeting of the Shareholders of the Company, such matter shall be taken-up only if the written consent of FCL has been obtained prior to such meeting.

(i) except as otherwise provided in Section 9.2 (Permitted Transactions), any transfer or license of all or substantially all of the Assets of the Company (including all, or substantially all Intellectual Property), including without limitation a Restricted Transfer;

(ii) any Restricted Transfer to an Affiliate, or a 'related party' of the Company, or the Existing Shareholders;

(iii) any amendment to the Articles of Association which is in conflict with the rights of FCL under this Agreement; and

(iv) any issuance of Securities to a Proposed Investor not in accordance with Section 7 (Further Issue of Capital). 10.16 Rights to veto in relation to amendment to Memorandum and Article of Association of a company which adversely impact the investors right, alteration in its capital structure, material divestment, transfer or disposal of an undertaking, material acquisition of any company business, undertaking or joint venture which have a direct effect on the investment do not form CS(COMM) 493 of 2020 Page 111 of 132 part of the ordinary course of business and are meant for protection of the investment and may not amount to control on the company, however, the imposition of restriction on voting rights for all the promoters and shareholders without the prior consent of the investor and the rights to interfere beyond the protective rights of the investment and disproportionate thereto, may cross over from the protective rights to controlling rights. 10.17 A conflated reading of the Clause-4.1 (iv) of the FCPL SHA and Clause-4.1 of the FRL SHA would show that vide the FCPL SHA a control was created even on the voting rights of the promoters of FCPL in relation to their decisions as shareholders of FRL so as to enable the approval of any and every resolution necessary or desirable to give effect to FCPL SHA and FRL SHA and likewise to ensure that no resolution of FRL is passed which is not in accordance with the FCPL SHA and/or FRL SHA. Even Clause- 4.1 of the FRL SHA correspondingly provides for an obligation on every person representing as a shareholder of FRL, to exercise any power to vote or cause the power to vote to be exercised at any meeting of the shareholders so as to enable the approval of any and every resolution necessary or desirable to give full effect to the FRL SHA and to ensure that no resolution which is not in accordance with FRL SHA is passed. 10.18 Clause 9.1 of the FRL SHA relates to reserved matters. It is a non- obstante clause that obligates the existing shareholders (as set out in Schedule 1) and FRL to undertake that FRL would not take up, decide, act upon or implement certain Reserved Matters, and further that such Reserved Matters shall not be voted upon at a shareholders meeting of FRL, nor any decision would be taken on such reserved matters by the shareholders or the directors or any committee of the board of FRL, nor CS(COMM) 493 of 2020 Page 112 of 132 would FRL be bound to any such resolutions relating to such reserved matters, unless such Reserved Matter has been first approved in the affirmative by FCPL. 10.19 The reserved matters are set out in Clause 9.1(i) to (iv) and comprise of:-

i) Any transfer or license of all or substantially all of the Assets of FRL (including all, or substantially all Intellectual Property), including without limitation a Restricted Transfer; ii) Any Restricted Transfer to an Affiliate or a related party of FRL or the Existing Shareholders. iii) Any amendment to the Articles of FRL which is in conflict with the rights of FCPL under the FRL SHA; and iv) Any issuance of securities to a Proposed Investor not in accordance with Section 7 of the FRL SHA (relating to further issue of capital). 10.20 Clause 9.1 therefore provides that all Reserved Matters as stipulated in Clause 9.1(i) to (iv) cannot be taken up, voted upon or implemented by FRL unless the same are expressly permitted by FCPL. 10.21 Whereas clause 9.1 makes it mandatory for FRL to first obtain consent of FCPL for acting upon Reserved Matters, Clause 13.1 of the FCPL SHA requires FCPL to take consent of Amazon for all such matters, Clause 13.1 of the FCPL SHA is also a non-obstante clause that obligates the Promoters and FCPL to not cause the material entity, i.e, FRL, to take up the following matters unless a prior written consent of the Investor, i.e., Amazon and the Promoters has been obtained by FCPL:

i) Take up, decide, act upon or implement the matters set out in the FRL SHA which require the consent of FCPL, or CS(COMM) 493 of 2020 Page 113 of 132 ii) Place such matters which require the consent of FCPL for a vote thereon at the board of directors meeting or shareholders meeting of FRL, or iii) Take any decision or cause any decision to be taken by the shareholders of the board of directors or any committee of the board of FRL on matters requiring consent of FCPL or iv) Be bound or committed to any resolutions or transactions pertaining to such matters which require the consent of FCPL; 10.22 Further Clause 13.1.1 of the FCPL SHA requires the promoters of FCPL and FCPL to not cause FRL to take up, decide, act upon or implement the matters as set out in FRL SHA, which require the consent of FCPL or place such matters for a vote thereon at the board or shareholders meeting of the FRL or take any decision or cause any decision to be taken by the shareholders or the Board or any committee of the board of FRL on such matters, or be bound/committed by any resolutions/transactions pertaining to such matters unless a prior written consent of Amazon and the promoters has been obtained by FCPL. It further provides that FCPL is required to take prior written consent from Amazon in case FRL issues securities which FCPL proposes to decline to subscribe. 10.23 A conjoint reading of Clause 9.1 of the FRL SHA and Clause 13.1 of the FCPL SHA therefore shows that firstly, express consent of FCPL is required by FRL to act upon Reserved Matters under Clause 9.1, and that secondly, such Reserved Matters that require the consent of FCPL squarely fall under Clause 13.1 of the FCPL SHA, which cannot be acted upon by FCPL or the Promoters unless approved in writing by Amazon. 10.24 Cumulatively, it is clear that Amazons consent is required by FRL to act upon Reserved Matters and that without the consent of Amazon, FRL CS(COMM) 493 of 2020 Page 114 of 132 is only entitled to deal with and carry out Permitted Transactions which are set out in Clause 9.2 of the FRL SHA. 10.25 Clause 9.2 (i) and (ii) set out the Permitted Transactions. It is severely limited in its operation and includes the sale or transfer of Non-Core Assets (other than Retail Assets) which constitute less than 2% of the turnover or Assets of FRL at the time of such sale, provided that such sale is undertaken at fair market value, and that in any one financial year, the FRL does not undertake more than one of such transaction. Another Permitted Transaction under 9.2(ii) is the sale or transfer of securities of any Person held by FRL where such Person operates the convenience stores under the brand name 7-Eleven which is an exempted entity. 10.26 Accordingly, for any sale or transfer to be undertaken by FRL which is not a Permitted Transaction (covered under Clause 9.2 of the FRL SHA), FRL would require the express consent of FCPL, and FCPL would in turn require the express consent of Amazon for all such matters as per Clause 13.2 of the FCPL SHA. As set out above, given the narrow ambit of permitted matters that can be taken up by FRL without requiring the consent of Amazon, there is prima-facie a very limited discretion available to FRL for conducting its own business. 10.27 Clause 15.17 of the FCPL SHA strongly relied upon by FRL provides: "For the avoidance of doubt, Parties hereby expressly record their undertaking that the Promoters and the Investor have no agreement or understanding whatsoever in relation to the acquisition of shares or voting rights in, or exercising control over, FRL and that the Company, the Promoters and the Investors otherwise do not intend to act in concert with each other in any way whatsoever. CS(COMM) 493 of 2020 Page 115 of 132 10.28 According to Amazon Clause 15.17 of the FCPL SHA is under the heading Call Options and not the main provisions. Clause 15 of the FCPL SHA provides Amazon with a Call option to purchase FRL shares, to become the single largest shareholder, upon the occurrence of a change in law event which is defined to include a relaxation if any, or all conditions prescribed, as on the Execution Date, under FEMA Regulations, with respect to foreign direct investment in multi retail brand. Thus, even on being able to exercise the call option if Amazon is not to have control over FRL then Amazon cannot exercise control over FRL in praesenti based on the conflation of the FCPL SHA and FRL SHA. Further as per Clause 15.1 Amazon though has a right in its sole discretion, to purchase either by itself or by its permitted affiliates, the FRL call option securities upon occurrence of a FRL change in Law Event, Amazon had no obligation to exercise the said option. 10.29 As noted above, the promoters of FCPL are the majority shareholders of FRL. Further, 9.82% of FRL's shareholding is with FCPL. Thus as per the FCPL SHA, on matters which require the consent of FCPL as set out in FRL SHA, no matter can be taken up, decided or implemented by the majority shareholders of FRL and the shareholders of FCPL without the consent of Amazon. These covenants prima facie transgress from a protective right to a controlling right in favour of Amazon particularly in view of the fact that the matters essentially requiring the consent of Amazon are of a very wide ambit, and the matters within the sole discretion of FRL are very limited. This seems to be for the reason that Amazon was not only safeguarding its investments by creating protective rights, but also creating preemptive rights CS(COMM) 493 of 2020 Page 116 of 132 in contemplation of any change in Indian law that would permit Amazon to hold substantial shareholding of FRL. 10.30 The rights granted to Amazon by conflation of the two Shareholders Agreements are prima facie disproportionate to the actual shareholding of Amazon and by camouflaging of words, the extensive rights held by Amazon by the provisions of the inter se agreements set out above, cannot be masked as mere protective rights so as to fall beyond the test of control as elaborated in Arcelor Mittal (supra). 10.31 Therefore, this Court is prima facie of the opinion that the conflation of the three agreements i.e. FRL SHA, FCPL SHA and FCPL SSA 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. Tortious interference 11.1 Case of FRL is that Amazon is unlawfully interfering in FRL's endeavour to survive by amalgamation of FRL alongwith other group companies with Future Enterprises Limited (FEL) and the subsequent transfer and vesting of the 'retail and wholesale undertaking' from FEL as a going concern on a slump sale basis to Reliance. FRLs transaction with Reliance being legal and valid, interference of Amazon therein amounts to tortious interference, hence Amazon is liable to be injuncted. Specific case of FRL is that the EA itself being a nullity, as the Emergency Arbitrator is a coram non judice, upholding the illegality thereof and/or holding that the Resolution dated 29th August, 2020 of FRL is not void or contrary to the statutory provisions and the right sought to be exercised by Amazon by CS(COMM) 493 of 2020 Page 117 of 132 conflating the FRL SHA, FCPL SHA and FCPL SSA as a single integrated contract, being illegal and violative of FEMA FDI Rules 2019, Amazon is liable to be injuncted from interfering in the transaction which is being carried out in the best interest of FRL and its stakeholders. 11.2 The tort of unlawful interference in a contract, also referred to as tortious interference and causing loss by unlawful means forms a species of economic torts and has since decades been a subject of judicial and academic debate. Lord Nicholls of Birkenhead in his opinion in OBG Ltd v Allan, [2007] UKHL 21 described the complexity in determining the ingredients of the tort of unlawful interference as under:- "139. .. In particular the House is called upon to consider the ingredients of the tort of interference with a business by unlawful means and the tort of inducing breach of contract. These are much vexed subjects. Nearly 350 reported decisions and academic writings were placed before the House. There are many areas of uncertainty. Judicial observations are not always consistent, and academic consensus is noticeably absent. In the words of one commentator, the law is in a terrible mess. So the House faces a daunting task. (Emphasis Supplied) 11.3 Similar observations were made by the Supreme Court of Canada in the decision of A.I. Enterprises Ltd. Versus Bram Enterprises Ltd. and Jamb Enterprises Ltd, 2014 SCC Online Can SC 16. Writing for the Court, Cromwell, J., opined:-

28. I will not dwell on the unfortunate state of the common law in relation to the unlawful means tort. As I noted earlier, there is not even consensus about what it ought to be called. One leading scholar simply observed that [t]he economic torts [of which the unlawful means tort is one] are in a mess: H. Carty, Intentional Violation of Economic Interests: The Limits of Common Law Liability (1988), 104 Law Q. Rev. 250, at p. CS(COMM) 493 of 2020 Page 118 of 132

278. Careful review of the development of the unlawful means tort reveals confusion, overlap and inconsistency: see, e.g., Carty, An Analysis of the Economic Torts (2nd ed.), at pp. 73- 78; P. Burns, Tort Injury to Economic Interests: Some Facets of Legal Response (1980), 58 Can. Bar Rev. 103, at pp. 145- 48; T. Weir, Economic Torts (1997), at pp. 36-43; L.L. Stevens, Interference With Economic Relations Some Aspects of the Turmoil in the Intentional Torts (1974), 12 Osgoode Hall L.J. 595, at pp. 617-19. At its core, however, the tort has two key ingredients: intention and unlawfulness. The gist of the tort is the intentional infliction of economic harm by unlawful means. (Emphasis Supplied) 11.4 One of the leading decisions on this subject and relied upon by FRL is the decision of the House of Lords in OBG Ltd. v. Allan (Supra), where the House of Lords was deciding 3 appeals that involved the same issues of law, though the facts therein were different. This decision succinctly lays down the law in relation to economic torts. The decision also discusses the other two decisions cited by FRL i.e. Lonhro PLC vs. Fyed and Merkur Island Shipping Corporation (supra) 11.5 In OBG Ltd. v Allan (Supra), the House of Lords rejected the unified theory propounded in Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106, where Lord Denning held that there could be liability for preventing or hindering performance of the contract (unlawful interference) on the same principle as liability for procuring a breach of contract. The decision in Torquay Hotel of Lord Denning was approved by Lord Diplock in Merkur Island (Supra). Therefore, pursuant to Merkur Island, the courts treated inducement/procurement of a breach of contract as the same tort as causing loss by unlawful means (tort of unlawful interference). 11.6 In OBG Ltd., the court rejected this unified theory and held that the CS(COMM) 493 of 2020 Page 119 of 132 tort for inducement/procuring the breach of contract is distinct from the tort of unlawful interference/causing loss by unlawful means. The position was concluded by Lord Nichols in Paragraph 194:- "194. It may be helpful to pause and take an overall look at where this leaves the law. The effect of the views expressed above is to draw a sharp distinction between two economic torts. One tort imposes primary liability for intentional and unlawful interference with economic interests. The other tort imposes accessory liability for inducing a third party to commit an actionable wrong, notably a breach of contract, but possibly some other actionable civil wrongs as well." 11.7 In para 45, the House of Lords held that the most important question concerning this tort is determining what constitutes as 'unlawful means'. Lord Hoffman opined as under:- "45. The most important question concerning this tort is what should count as unlawful means. It will be recalled that in Allen v Flood [1898] AC 1, 96, Lord Watson described the tort thus- when the act induced is within the right of the immediate actor, and is therefore not wrongful in so far as he is concerned, it may yet be to the detriment of a third party; and in that casethe inducer may be held liable if he can be shown to have procured his object by the use of illegal means directed against that third party." 11.8 The rationale of the tort was noted by Lord Hoffman in para 46 as under:-

46. The rationale of the tort was described by Lord Lindley in Quinn v Leathem [1901] AC 495, 534-535: a persons liberty or right to deal with others is nugatory, unless they are at liberty to deal with him if they choose to do so. Any interference with their liberty to deal with him affects him. If such interference is justifiable in point of law, he has no redress. Again, if such interference is wrongful, the only person who can sue in respect of it is, as a rule, the person immediately affected by it; another who suffers by it has usually no redress; the CS(COMM) 493 of 2020 Page 120 of 132 damage to him is too remote, and it would be obviously practically impossible and highly inconvenient to give legal redress to all who suffer from such wrongs. But if the interference is wrongful and is intended to damage a third person, and he is damaged in fact in other words, if he is wrongfully and intentionally struck at through others, and is thereby damnified the whole aspect of the case is changed: the wrong done to others reaches him, his rights are infringed although indirectly, and damage to him is not remote or unforeseen, but is the direct consequence of what has been done. (Emphasis Supplied) 11.9 FRL has cited paragraph 47 and 51 of OBG v. Allan (Supra). These paragraphs form part of the opinion of Lord Hoffman, who wrote for the majority in so far as the essence of the tort of unlawful interference and the issue of unlawful means as an element of the tort of unlawful interference is concerned. Paras 47 and 51 of the report read as under: "47. The essence of the tort therefore appears to be (a) a wrongful interference with the actions of a third party in which the claimant has an economic interest and (b) an intention thereby to cause loss to the claimant. The old cases of interference with potential customers by threats of unlawful acts clearly fell within this description. So, for the reasons I have given, did GWK Ltd v Dunlop Rubber Co Ltd 42 TLR 376. Recent cases in which the tort has been discussed have also concerned wrongful threats or actions against employers with the intention of causing loss to an employee, as in Rookes v Barnard [1964] AC 1129, or another employer, as in J T Stratford & Son Ltd v Lindley [1965] AC 269. In the former case, the defendants conspired to threaten the employer that unless the employee was dismissed, there would be an unlawful strike. In the latter, the union committed the Lumley v Gye tort of inducing breaches of the contracts of the employees of barge hirers to prevent them from hiring the plaintiff's barges. xx xx xx

51. Unlawful means therefore consists of acts intended to CS(COMM) 493 of 2020 Page 121 of 132 cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant. It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant." 11.10 In India, the ingredients of tortious unlawful interference were succinctly laid down in the decision 2017 SCC Online Calcutta 14920 Lindsay International Vs. L.N. Mittal following the decision in OBG Limited (supra) as under:

(i) use by the defendant of unlawful means.

(ii) interfering with the action of a third party in relation to the claimant.

(iii) intention to cause loss to the complainant.

(iv) Damages. 11.11 In Lindsay International (supra) the Court also noted various decisions from different jurisdictions abroad before laying down the necessary ingredients for determining tortious unlawful interference as under: "73. The indeterminate ambit of unlawful means thus remains one of the principal causes of uncertainty as to the potential scope of liability under this tort. The issue has been the subject of some judicial deliberation in other common law jurisdictions. In Scotland, in McLeod v. Rooney, Lord Glennie concluded from an extensive review of the speeches in OBG Ltd. v. Allan that the essential aspect [of the tort] is that the loss is caused to the claimant through a third party on whom the defender has unlawfully acted. That is the control mechanism. The inquiry focuses on the nature of the disruption caused as between the third party and the claimant rather than on the directness of the causative link between the defender's wrong and the claimant's loss. ([2009] CSOH 158; 2010 S.L.T. 499 at 18) CS(COMM) 493 of 2020 Page 122 of 132

74. A party must be shown to have known that they were inducing a breach of contract. It is not enough that a defendant knows that he is procuring an act which, as a matter of law or construction of the contract, is a breach, nor that he ought reasonably to have known that it is a breach. (See OBG v. Allan per Lord Hoffman at Paragraph 39; British Industrial Plastics Ltd. v. Ferguson (1940) 1 All E.R. 479).

75. In East England Schools CIC (t/a 4MySchools) v. Palmer (2013) EWHC 4138 (QB); (2014)

I.R.L.R. 191, it was held that the second defendant knew that it was likely that the first defendant was subject to some form of restrictive covenant, but had failed to take reasonable steps to make himself aware of the precise nature of those restrictions. Further, the second defendant knew that his instructions could well require the first defendant to act in breach (and in fact they did). As such, the second defendant was liable for procuring the first defendant's breach. (See Clerk & Lindsell on Torts, 21 Edition)

76. In Quinn v. Leathem Lord Macnaghten (1901) A.C. 495 at 510) it is said that a violation of a legal right committed knowingly is a cause of action, and It is a violation of legal right to interfere with contractual relations recognized by law if there be no sufficient justification for the interference.

77. Interference with the performance of a contract is an actionable wrong unless there be justification for interfering with the legal right. This tort is committed when A either persuades B to break his contract with C or by showing some unlawful acts he indirectly prevents B to perform contract. The origin of this tort is traced to Lumley v. Gye as mentioned earlier.

78. The principles that emerged from the discussions made above are that interference with the subsisting contract may arise in three different ways. It is not restricted simply to procuring a breach of contract but covers interference with the performance of the contract as well, that is to say, preventing or hindering one party from performing his contract even though it may not be a breach of the contract. Direct intervention by the persuasion whether by himself or his agents CS(COMM) 493 of 2020 Page 123 of 132 by words or other acts of communication if are intended to influence to break the contract with C would constitute a cause of action.

79. The second category consists of cases where the intervener does some unlawful acts on the person or property of B which disables him in performing his contract with C.

80. The third category covers cases where intervener persuades the third party to do some unlawful acts which interferes in B's due performance of his contract with C as was intended.

81. In Greig v. Insole, (1978) 3 All ER 449, five conditions have laid down that are required to be fulfilled by the plaintiff in a suit for interference with a subsisting contract. First, there must be either (a) direct interference with performance of the contract or (b) indirect interference with performance coupled with the use of unlawful means. Secondly, the defendant must be shown to have knowledge of the relevant contract; but it is not necessary that he should have known its precise terms. (Emerald Construction Co. Ltd. v. Lawthien, (1966) 1 WLR 691). Thirdly, he must be shown to have had the intent to interfere with it. Fourthly, the plaintiff must show that he has suffered special damage, that is, more than nominal damage. Fifthly, so far as is necessary, the plaintiff must successfully rebut any defence based on justification which the defendant may put forward.

82. At this stage, however, the Court is only required to find out if the necessary ingredients of such economic tort constituting the cause of action are present in the plaint and not to assess the evidentiary value of such averments." 11.12 In 1999 (50) DRJ 656 Pepsi Foods Ltd. Vs. Bharat Coca Cola Holdings Pvt. Ltd., referred by Amazon though not relied during the course of arguments, Pepsi Foods sought permanent injunction against Coca Cola restraining it from making offers and inducement to their key employees from time to time, to breach employment contract with Pepsi and join Coca Cola This Court declining the interim injunction held that the matter required evidence and that the inducement would curtail right to seek better CS(COMM) 493 of 2020 Page 124 of 132 employment and the freedom to change employment. It was held that an injunction can be granted only for protecting rights of the plaintiff but cannot be granted to limit the legal rights of the defendant. 11.13 In 2020 SCC Online Del 673 Inox Leisure Limited Vs. PVR Limited, a Coordinate Bench of this Court was dealing with a case where Inox had entered into a contract with property owners in Amritsar to develop a multiplex. Inox contended that PVR, its competitor, induced the property owner to break its contract with Inox and instead entered into a contract with PVR for developing the multiplex. Thus, Inox sought permanent injunction restraining the defendant from attempting to induce breach of contract. The suit was dismissed at the stage of settling of issues, allowing the application under Order VII Rule 11 CPC by holding that relief as claimed was barred by law in view of Section 27 of the Indian Contract Act and the fundamental right to carry on business. However, in appeal, although the impugned judgment was not challenged on merits, the Division Bench of this Court observed that an action for tortious interference is a matter of evidence and trial is necessary. 11.14 Thus existence of a contract, interference wherein is alleged is a sine qua non for the tort of inducement. Contention on behalf of Amazon is that no such contract between FRL and Reliance has been placed on record hence FRL's suit for tortious interference is not maintainable. The two fold submission of Amazon in this regard is that firstly, the resolution of FRL dated 29th August, 2020 is void and secondly FCPL has not granted its consent which was required by FRL before proceeding with the transaction and in any case the said document has not seen the light of the day. CS(COMM) 493 of 2020 Page 125 of 132 11.15 As noted in the preceding paragraphs, the resolution dated 29th August, 2020 is neither void nor contrary to any statutory provisions. Further, FRL has filed the document dated 29th August, 2020, signed by FRL and FCPL showing that FCPL has consented to the transaction. According to Amazon since the said document has not been filed accompanied by statement of truth under Order VI Rule 15(a) of CPC the said document cannot be looked into. As noted above in the initial paragraphs of this judgment, parties at the ad-interim stage have advanced arguments at length without filing written statements/counter affidavits and to this procedure both parties agreed. Amazon has also filed number of documents including various emails, transcripts of the proceedings recorded before the Emergency Arbitrator beseeching this Court to consider the same without even filing written statements or counter affidavits much less statement of truth. Hence, this court is not declining to take on record the document dated 29th August, 2020. Of course, it will be for the parties to comply with the provisions of the Code of Civil Procedure, 1908 while completing the pleadings in the suit and file necessary affidavits. 11.16 The Resolution dated 29th August, 2020 of FRL approving the proposed transaction between FRL and Reliance satisfies the requirement of a valid contract. Further the plea of Amazon that the Resolution is in breach of the FRL SHA as no prior consent of FCPL is taken is negated by the letter dated 29th August, 2020 from FRL to FCPL whereon consent of FCPL is duly enclosed. The Resolution and the letter of FRL dated 29th August, 2020 clearly satisfy the first requirement of a subsisting contract, interference wherein is alleged. 11.17 Thus applying the four tests as laid down in Lindsay International CS(COMM) 493 of 2020 Page 126 of 132 (supra) to the facts of the present case, it is evident that the second, third and fourth test stand prima facie satisfied as Amazon has written letters to various statutory authorities/Regulators asking them not to grant approval to the transaction between FRL and Reliance, which would cause loss and damages to both FRL and Reliance. 11.18 As regards the first test of "use of unlawful means" by Amazon, FRL has relied on three grounds, reliance whereon by Amazon in its representations to the statutory authorities/Regulators makes Amazon's representation illegal. Firstly, that Amazon has illegally relied upon the EA order which is invalid as the Emergency Arbitrator has no legal status in Part I of the A&C Act; Secondly, that Amazons characterization of the board resolution of FRL dated 29th August, 2020 as a void board resolution is wholly without any basis in law and illegal; and Thirdly, that Amazon has made false assertions as to the legality of its rights by conflating the FCPL SHA and FRL SHA, as the same amounts to violation of FEMA (FDI) Rules. 11.19 In OBG Ltd. v. Allan (Supra), the House of Lords recognized that although the ingredient of unlawful means is well established, there exists controversy as to its scope. Various earlier decisions were discussed and the broad and narrow scope of unlawful means was highlighted. Relevant extract is set out hereunder:-

149. Although the need for unlawful means is well established, the same cannot be said about the content of this expression. There is some controversy about the scope of this expression in this context.

150. One view is that this concept comprises, quite simply, all acts which a person is not permitted to do. The distinction is between doing what you have a legal right to do and doing CS(COMM) 493 of 2020 Page 127 of 132 what you have no legal right to do: Lord Reid in Rookes v Barnard [1964] AC 1129, 1168-1169. So understood, the concept of unlawful means stretches far and wide. It covers common law torts, statutory torts, crimes, breaches of contract, breaches of trust and equitable obligations, breaches of confidence, and so on.

151. Another view is that in this context unlawful means comprise only civil wrongs. Thus in Allen v Flood itself Lord Watson described illegal means as means which in themselves are in the nature of civil wrongs: [1898] AC 1, 97-98. A variant on this view is even more restricted in its scope: unlawful means are limited to torts and breaches of contract. (Emphasis Supplied) 11.20 Eventually, the House of Lords by majority agreed to the view taken by Lord Hoffman, who opined that the scope of unlawful means should be narrow as laid down in [1898] AC 1 Allen v Flood. It was in this background that he defined unlawful means in Paragraph 51 of his opinion as noted above. 11.21 Various examples of what was found unlawful means in this context can be ascertained from the judicial decisions referred to in OBG (Supra). Lord Hoffman illustrated the cases of [1908] 1 Ch 335 National Phonograph Co Ltd v Edison-Bell Consolidated Phonograph Co Ltd, where the defendant had fraudulently induced a third party to act to the plaintiffs detriment. The fraud was unlawful means as it was actionable by the third party if it had suffered any loss. The decision in [1990] 2 QB 479 Lonrho plc v Fayed was also highlighted where the defendant had made fraudulent representations to third parties with an intent to cause damage to the Plaintiff, which would have been actionable by the third parties if they had suffered loss. CS(COMM) 493 of 2020 Page 128 of 132 11.22 Applying the principles to determine the unlawful means as laid down by Lord Hoffman in OBG Ltd. (supra) to the facts of the present case, it is evident that on two counts, that is, Amazon asserting that the Resolution dated 29 August, 2020 is void and also asserting its right conflating the FCPL SHA and FRL SHA 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 as defined in OBG Ltd. (supra). Therefore, on two counts, FRL has been able to make out a prima facie case of tortious interference by Amazon. It is clarified that it is not the making of the representation by Amazon to the statutory authorities or the Regulators, which is an actionable wrong but making a representation based on incorrect assertions which makes the act based on "unlawful means". It is further clarified that at this stage this Court is only required to form prima facie opinion which this Court has done on the facts before it and as held by the Division Bench of this Court in the case of Inox Leisure Ltd. (supra), that whether there is an unlawful interference or not, can be finally determined only after the parties have lead evidence. There is yet another test which has been laid down in some of the decisions such as Balailal Mukherjee vs. Sea Traders, Pepsi Food Ltd. and Greig vs. Insole (supra) that there should be no lawful justification of the defender in interfering however, that is an issue which overlaps while determining the CS(COMM) 493 of 2020 Page 129 of 132 issue of balance of convenience and will be dealt in the subsequent paragraphs. Interim Injunction 12.1 Supreme Court in the decision reported as 1992 (1) SCC 719 Dalpat Kumar &Anr. vs. Prahlad Singh &Ors. laying down the principles for grant of injunction noted that the grant of injunction is a discretionary relief and exercise thereof is subject to the Court satisfying that (1) there is a serious disputed question to be tried in the suit and that on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant; (2) the court's interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial; and (3) that the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it. It was held that therefore, the burden is on the plaintiff by evidence aliunde by affidavit or otherwise that there is a prima facie case in his favour which needs adjudication at the trial. The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. However, satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non- interference by the Court would result in irreparable injury to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but CS(COMM) 493 of 2020 Page 130 of 132 means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition is that the balance of convenience must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that it is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit. 12.2 In the decision reported as 1995 (5) SCC 545 Gujarat Bottling Co.Ltd. & Ors. vs. Coca Cola Co. & Ors. the Supreme Court reiterating the principles for grant of interim injunction noted that the decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting CS(COMM) 493 of 2020 Page 131 of 132 from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the balance of convenience lies. [See: Wander Ltd. v. Antox India (P) Ltd. [1990 Supp SCC 727]. In order to protect the defendant while granting an interlocutory injunction in his favour the court can require the plaintiff to furnish an undertaking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trial. 12.3 Thus the trinity of the principles for grant of interim injunction i.e. prima facie case, irreparable loss and balance of convenience are required to be tested in terms of principles as noted above. Since this Court has held that prima facie the representation of Amazon based on the plea that the resolution dated 29 August, 2020 of FRL is void and that on conflation of the FCPL SHA and FRL SHA, the 'control' that is sought to be asserted by Amazon on FRL is not permitted under the FEMA FDI Rules, without the governmental approvals, this Court finds that FRL has made out a prima facie case in its favour for grant of interim injunction. However, the main tests in the present case are in respect of "balance of convenience" and "irreparable loss". Even if a prima facie case is made out by FRL, the balance of convenience lies both in favour of FRL and Amazon. If the case of FRL is that the representation by Amazon to the statutory authorities /regulators is based on illegal premise, Amazon has also based its representation on the alleged breach of FCPL SHA and FRL SHA, as also the directions in the EA order. Hence it cannot be said that the balance of convenience lies in favour of FRL and not in favour of Amazon. It would be a matter of trial after parties have led their evidence or if decided by any CS(COMM) 493 of 2020 Page 132 of 132 other competent forum to determine whether the representation of Amazon that the transaction between FRL and Reliance being in breach of the FCPL SHA and FRL SHA would outweigh the plea of FRL in the present suit. Further in case Amazon is not permitted to represent its case before the statutory authorities/Regulators, it will suffer an irreparable loss as Amazon also claims to have created preemptive rights in its favour in case the Indian law permitted in future. Further there may not be irreparable loss to FRL for the reason even if Amazon makes a representation based on incorrect facts thereby using unlawful means, it will be for the statutory authorities/Regulators to apply their mind to the facts and legal issues therein and come to the right conclusion. There is yet another aspect as to why no interim injunction can be granted in the present application for the reason both FRL and Amazon have already made their representations and counter representations to the statutory authorities/regulators and now it is for the Statutory Authorities/Regulators to take a decision thereon. Therefore, this Court finds that no case for grant of interim injunction is made out in favour of the FRL and against Amazon. Conclusion

13. Consequently, the present application is disposed off, declining the grant of interim injunction as prayed for by FRL, however, the Statutory Authorities/Regulators are directed to take the decision on the applications/objections in accordance with the law. (MUKTA GUPTA) JUDGE DECEMBER 21, 2020 vn/ga

CS(COMM) 493/2020

Future Retail Ltd. v. Amazon Com Investment Holdings Llc

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

FRL's Arguments

Amazon's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Future Retail Ltd. v. Amazon Com Investment Holdings Llc

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