New Delhi: US-based e-commerce giant Amazon Thursday urged the Delhi High Court to order enforcement of the award by Singapore’s Emergency Arbitrator (EA) restraining the Future Group from going ahead with its Rs 24,713 crore deal with Reliance Retail.
The plea also sought the detention of the Biyanis, directors of Future Coupons Pvt Ltd 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 J R Midha, after hearing the arguments for several hours, said he will continue with the hearing on Friday.
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 Future Retail Ltd’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, Future Coupons 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 per cent 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.
The hearing
During the hearing, senior advocate Gopal Subramanium, representing Amazon, said the EA passed a detailed interim order on October 25 last year after hearing all the parties and had found that he has jurisdiction to adjudicate the issue.
He said the question of jurisdiction was raised before the EA and it was rejected on account of the group of companies approach.
He claimed that no action has been taken by any of the respondents to reverse or modify the emergency award.
Why should we not enforce the order passed by the EA. Though he belongs to Singapore, he is seated in Delhi, he said.
Senior advocate Darius Khambata, representing Future Retail, raised objection over maintainability of the petition and said under Section 17 of the Arbitration Act, only the final arbitration tribunal’s order/award can be enforced and not an emergency order.
He said Section 17 of the Act only recognises the interim order passed by the arbitral tribunal and no other authority.
Also read: Amazon is becoming a global punching bag for antitrust regulators
Amazon’s petition against Future group
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 last year, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance.
The SIAC on October 25 last year, 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.
Also read: Amazon asks Delhi HC to jail Future Group’s Kishore Biyani in legal battle