The Delhi High Court on Wednesday stayed the Amazon-Future arbitration, which is going on before a three-member arbitral tribunal over the latter’s Rs 24,500-crore deal with Reliance.
It also stayed a single judge’s January 4 order dismissing the Future Group’s two pleas, seeking a direction to the arbitration tribunal to decide on its application for terminating the arbitration proceedings before moving further.
The tribunal is adjudicating Amazon’s objections to Future Retail’s deal with Reliance.
A bench of Chief Justice D N Patel and Justice Jyoti Singh said there is a prima facie case in favour of appellants Future Retail Ltd and Future Coupons Pvt Ltd and if a stay is not granted, it will cause an irreparable loss to them.
“Looking into the order passed by the Competition Commission of India on December 17, 2021, by which the approval (for deal with Future Group) granted on November 28, 2019, was kept in abeyance and showed there was a suppression of facts by the respondents (Amazon), there is a prima facie case in favour of appellants.
“If a stay is not granted, it will cause irreparable loss to these appellants, the bench said.
The court said much has been argued by both sides like a final hearing on the appeals and all these grounds will be dealt with on February 1, including the issue of maintainability.
“We hereby stay further proceedings of the arbitral tribunal till the next date of hearing and we also stay the single judge’s January 4 order till the next date of hearing,” the bench said while listing the matter for further hearing on February 1.
The high court also issued a notice to Amazon.com NV Investment Holdings LLC on the appeals filed by Future Retail Ltd and Future Coupons Pvt Ltd challenging the single judge’s order.
Legal tussle
Amazon and the Future Group have been locked in a legal tussle after the US ecommerce giant dragged the latter to arbitration at the Singapore International Arbitration Centre in October 2020.
Amazon argued that Future Retail Ltd violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani’s Reliance Retail on a slump sale basis for Rs 24,500 crore.
Future Retail Ltd and Future Coupons Pvt Ltd were represented through senior advocates Mukul Rohatgi and Harish Salve respectively, who submitted that the arbitral proceedings be stopped otherwise it would be illegal.
Senior advocate Gopal Subramanium, who represented Amazon, said it was incorrect to say that the tribunal was not mindful of the termination application and that it was not considering it. He contended the tribunal has accommodated the counsel for Future Coupons Pvt Ltd and Future Retail Ltd but they cannot dictate the tribunal what it should do.
The single judge, in its January 4 order, had said it was not for the court to interfere with the scheduling of the arbitration proceedings and no grounds for interference were made out in the present petitions.
He had said the tribunal has already fixed January 8 as the date for hearing the termination application after cutting short the scheduled four days’ hearing of the expert witnesses.
The single judge had also stated that lawyers representing Future Group testing positive for COVID-19 cannot be a ground to postpone the arbitral hearings, the dates of which were fixed a long time ago after taking into account the convenience of the parties and giving ample time to prepare.
On Wednesday, Rohatgi told the bench that the Supreme Court and the high court have been postponing matters every day if a lawyer says he or she is unwell and “heavens will not fall if the tribunal does the same”.
He had earlier argued that the three-member arbitral tribunal was acting perversely by not deciding the issue of termination of the ongoing arbitration on a priority basis in view of the anti-trust regulator holding that the approval granted to Amazon for its agreement with Future Coupons Pvt Ltd, which formed the basis of the arbitration, was facilitated by fraud.
Amazon’s objections
In December last year, the Competition Commission of India suspended its over-two-year-old approval for Amazon’s deal to acquire a 49-percent stake in Future Coupons Pvt Ltd and Future Retail Ltd’s promoter, and also slapped a penalty of Rs 202 crore on the ecommerce major.
Salve had submitted that the tribunal, which is scheduled to hear issues concerning damages from January 5 to January 7, should first take up the termination application and defer the proceedings on other issues.
Amazon has been objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008 and is engaged in the business of marketing and distribution of gift cards, loyalty cards, and other reward programmes to corporate customers.
In October last year, the high court had declined to stay the arbitral tribunal’s order refusing to interfere with the Emergency Award (EA), which restrained Future Group from going ahead with the deal with Reliance.
Several issues arising from the Amazon-Future legal battle are pending before the Supreme Court.
