Business: SC clears Amazon’s way on Future Group
New Delhi: The Supreme Court on Friday allowed the appeal filed by the global e-commerce behemoth Amazon against a Delhi High Court order staying attachment of properties of Future Group companies and their founder Kishore Biyani in respect of its Rs.24,713 crore deal with Reliance Retail.
In a major relief to Amazon, an SC Bench, comprising Justices Rohinton Fali Nariman and BR Gavai, held that the order of an Emergency Arbitrator (EA) is enforceable in India, under Section 17(2) of the Arbitration Act.
“We have framed two questions and answered them as Emergency Arbitrator’s award holds good and can be enforced under Section 17(2). The appeal is allowed,” Justice Nariman said reading out the judgment, media reported.
A Division Bench of the Delhi High Court had stayed an order passed by the single judge and directed the attachment of properties.
The single judge order of the Delhi HC had upheld the award of an EA, directed attachment of the properties, and restrained Future Retail Ltd from going ahead with the Rs 24,713 crore merger with Reliance Retail, according to Bar & Bench. However, a Division Bench had stayed in this order, prompting the Amazon appeal.
Welcoming the SC’s verdict upholding the EA’s award, an Amazon spokesman said: “We hope that it will hasten a resolution of this dispute with Future Group.”
According to legal experts, the apex court has now finally ruled in favour of Amazon in its high profile and long-running dispute with Future Retail Ltd over its merger deal with Reliance group.
With this decision, the SC has upheld the enforceability of the Emergency Award under Indian law, they said.
“This decision sends a positive signal to global players and foreign companies reaffirming that their rights would be protected in India under Indian law. It would have a long-term impact on future investment deals and investors”.
In effect, the SC verdict came as a major victory for Amazon as it has restrained Future Group’s mega-deal with Reliance, and is valid and enforceable under Indian law. Last week, the apex court had reserved its judgment in the case about the ruling by a Singapore tribunal restraining Future from going ahead with its merger with Reliance.
The Bench dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act, despite the fact that the term EA is not used in arbitration laws here.
Amazon.com NV Investment Holdings LLC and Future Retail Ltd (FRL) were embroiled in a bitter legal fight over the Future-Reliance mega-deal. Amazon had urged the apex court to declare the EA award as valid and enforceable.
The SC verdict came almost a year after Reliance Retail announced that it will be buying Future Group’s retail, wholesale, and logistics and warehousing businesses by way of a slump sale for Rs 24,713 crore in August 2020.
This prompted Amazon to take FRL into an EA before the Singapore International Arbitration Centre (SIAC) over an alleged breach of contract by the Future Group.
Amazon had first filed a plea before the Delhi HC’s single judge for enforcement of the October 25, 2020, EA award by SIAC restraining FRL from going ahead with the deal with Reliance Retail.
On February 8, the Delhi HC’s Division Bench had stayed the single judge direction to FRL and various statutory authorities to maintain a status quo on the mega-deal. The interim direction was passed on FRL’s appeal challenging the February 2 order of the single judge.
The HC Division Bench stayed the single judge order as FRL was not a party to the share subscription agreement (SSA) between Amazon and Future Coupons Pvt Ltd (FCPL), and the US e-commerce giant was not a party to the deal between FRL and Reliance Retail.
It had also declined Amazon’s request to keep its order in abeyance for a week so that it can explore appropriate remedies.
(VP)
