The Indian chapter of the legal battle between Amazon.com Inc. and Kishore Biyani’s Future Group has reached its final leg, with the Supreme Court today beginning to hear arguments in the case.
Senior Advocate Harish Salve, representing Future Retail Ltd., informed the court that proceedings before Singapore International Arbitration Centre concluded last week.
The arbitral tribunal heard arguments on request of vacating the emergency arbitrator’s order which put on hold the Rs 27,513-crore transaction between Future Retail and billionaire Mukesh Ambani’s Reliance Retail Ltd. The tribunal will also decide whether Future Retail can be made a party to the arbitration proceedings between Amazon and Future Coupons.
Following Salve’s statement, Amazon’s counsel Senior Advocate Gopal Subramanium began his arguments by laying out the history of the dispute.
Subramanium argued in defence of the emergency arbitrator’s award and the subsequent judgment of a single-judge bench of the Delhi High Court. In March, the bench had held that the interim order of the Emergency Arbitrator was valid and capable of being enforced under Indian law. This was subsequently stayed by the division bench.
Subramanium told the top court that:
Emergency Arbitrator is an arbitrator under the Indian law.
There is no provision in the Arbitration Act that says there cannot be an emergency arbitrator.
The emergency arbitrator’s order constitutes an interim measure under Section 17(1) of the Arbitration Act and can be enforced under Section 17(2). The provision allows a party to seek enforcement of an interim order passed by an arbitral tribunal in the same manner as it would for a court order.
There is a procedure to set aside an order but one cannot self-style it as a nullity.
Future Retail, Future Coupons Private Ltd. or the Biyanis didn’t file any appeal against the emergency order.
Future Retail repeatedly declared the emergency arbitrator’s order as a nullity.
The core understanding underlying Amazon’s investment in Future Coupons was that retail assets would continue to rest with Future Retail.
Amazon has not consented for transfer of retail assets.
The hearing before the bench of Justice Rohinton F Nariman and Justice BR Gavai is likely to resume on July 27.
Future Retail Vs Amazon: Story So Far
Amazon.com NV Investment Holdings LLC has alleged that the Rs 27,513-crore deal between Reliance Retail and Future Group violates its contractual rights.
In 2019, Amazon had invested in Future Group by acquiring a 49% stake in Future Coupons Ltd.—a promoter entity of Future Retail. Future Coupons holds 9.82% in Future Retail. At the time, Future Coupons and Future Retail had also entered into a shareholders’ agreement.
Subsequently, Future Retail entered into an agreement with Reliance Retail to sell its retail, wholesale, logistics and warehousing assets.
In October last year, the emergency arbitrator granted an interim award in favour of Amazon. It had directed Future Group to put on hold its transaction with Reliance Retail.
In February, the apex court had agreed to hear the matter after the division bench of the Delhi High Court lifted the status quo on Future-Reliance deal.
The division bench order was passed after Future Retail appealed against the single-judge bench‘s interim order of status quo while hearing Amazon’s enforcement application on the emergency arbitrator’s order.