Delhi HC Ask If Amazon, Future Open To Resolve Issue Relating To Reliance DealPage Visited: 19
The Delhi High Court sought to know whether US-based e-commerce giant Amazon and Kishore Biyani led Future Retail Ltd (FRL) were open to resolving the issue arising out of Rs 24,713 crore deal between FRL and Reliance Retail on February 1.
The counsel for both, Amazon and Future Group, submitted that they would seek instructions and inform the court on February 2. The court was hearing a plea by Amazon seeking direction to order enforcement of the award by Singapore’s Emergency Arbitrator (EA) restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail.
Amazon.com NV Investment Holdings LLC, in its plea, also sought detention of the Biyanis, directors of Future Coupons Pvt Ltd (FCPL) and FRL and other related parties in civil prison and attaching of their properties for alleged “wilful disobedience” of the emergency arbitrator’s order.
Justice JR Midha asked the parties to inform it on February 1 if any such endeavour could be made and clarified that this should not be taken as deferring the proceedings and it would continue as scheduled.
The court, which asked if any attempt has been made to resolve the issue, suggested that if parties would be willing, it can refer the matter to two retired judges of the Supreme Court. The court also said it will consider whatever protective order can be passed.
In commercial matters, it is always helpful to find a solution, it said. To this, senior advocate Gopal Subramanium, representing Amazon, said he will take instructions on it as nothing tangible has happened.
Senior advocate Darius Khambata, representing FRL, also said he will take instructions and inform the court.
Amazon has approached the high court seeking to restrain Kishore Biyani-led Future Group from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group. It also sought to restrain Future Group from taking any steps to transfer or dispose of FRL’s retail assets or the shares held in FRL by the Biyanis in any manner without prior written consent of Amazon
The Future Group and Amazon have been locked in a battle after the US-based company took FRL into the emergency arbitration over alleged breach of a contract between them.
The three domestic firms — FRL, FCPL and Reliance — have however contended before the high court that if Amazon’s claim — that it indirectly invested in FRL by investing in FCL — was accepted then it would amount to a violation of Indian foreign direct investment laws which permit only 10 percent investment by a foreign entity in the multi-brand retail sector.
According to Amazon, the EA award passed under the Singapore International Arbitration Centre (SIAC) Rules is enforceable under Section 17(2) of the Arbitration and Conciliation Act.
It referred to an order passed by the high court on December 21, 2020, prima facie holding that the EA’s award was valid under the Indian law.
Senior advocate Harish Salve, also representing FRL, had earlier submitted that Amazon had a deal with FCPL and signed an agreement with Biyani. FCPL has a shareholding agreement with FRL which has no agreement with Amazon.
Subramanium had urged that FRL shall not further precipitate the situation as the matter is being heard by the court.
In the petition, Amazon has alleged that Future Group, Kishore Biyani and other promoters and directors have deliberately and maliciously disobeyed the EA award despite it being binding on them and not having challenged it in accordance with the law.
The majority respondents’ action of simply ignoring the order (of EA) and continuing with the impugned transaction (deal) is not only contumacious but calls into serious question their respect for enforceability of contracts, the rule of law and the administration of justice.., it said. It sought to injunct Future Group and its officials from taking any steps in furtherance of the deal with Reliance.
In August 2020, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance. The SIAC on October 25 2020, had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Subsequently, Amazon wrote to market regulator SEBI, stock exchanges and Competition Commission of India (CCI), urging them to take into consideration the Singapore arbitrator’s interim decision as it is a binding order, FRL had earlier told the high court.
As per the SIAC interim order, a three-member arbitration panel needs to be set up within 90 days (from the date of the judgement) with one judge each being appointed by Future and Amazon, along with a third neutral judge.
On November 10, 2020, Amazon had told the court that it and FCL have appointed their respective arbitrators.
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