The Supreme Court on February 23 deferred the hearing on Amazon’s plea seeking resumption of international arbitration proceedings in a dispute with Future Group.
A Supreme Court bench headed by Chief Justice of India NV Ramana noted that the issue of arbitration proceedings hinges on an order passed by the Competition Commission of India (CCI) on December 17, keeping in abeyance its approval for the investment deal between Amazon and Future Group.
With Amazon challenging the CCI order, and Future group, on the other hand, citing the CCI order for seeking termination of the arbitration proceedings, the decision of the National Company Law Appellate Tribunal (NCLAT) becomes crucial n the case.
The present case, the Supreme Court said, is in one way or the other connected with the outcome of the NCLAT’s decision on the validity of the CCI order. The NCLAT is scheduled to hear the appeal on February 25. Accordingly, the Supreme Court deferred the hearing till NCLAT concludes its hearing.
The apex court asked the parties to seek an expeditious hearing before the NCLAT while adjourning the case till March 3.
Amazon informed the apex court today that the arbitration proceedings had been suspended after the high court’s order. "It is in the best interest of all stakeholders if the (arbitration) proceedings are concluded expeditiously,” Senior Counsel Gopal Subramanium said representing the ecommerce major.
Future Group highlighted that the December 17 order of the CCI formed the basis for it to seek termination of the arbitration proceedings. However, the CCI order is challenged before the appellate forum by Amazon, Senior Counsel Mukul Rohatgi told the Supreme Court. The fate of the CCI order at this point remains uncertain, he explained.
The apex court has decided to wait for clarity from the NCLAT on the issue of validity of the CCI order before hearing Amazon’s appeal challenging the Delhi High Court’s stay order on arbitration proceedings.
The Delhi High Court had in January passed an interim order staying the arbitration proceedings that were going on before the Singapore International Arbitration Centre (SIAC) governed tribunal on a plea made by the Future Group.
Future Group took support in the Competition Commission of India’s (CCI) December 2021 order which temporarily suspended the regulator’s approval for the 2019 investment deal between Amazon and one of Future Group firm Future Coupons Pvt Ltd. It was this investment deal due to which the arbitration proceedings were kicked off.
Future group claimed that with the CCI approval for the deal suspended, the deal is no longer in force and the arbitration proceedings emanating from the same are rendered irrelevant. A division bench of the high court found prima facie merit in this argument and stayed the proceedings till further orders.
Future Group had moved the high court after the tribunal was unable to accommodate its plea seeking termination of the arbitration proceedings on priority. While a single-judge of the high court dismissed the plea, a division-bench proceeded to stay the proceedings.
This stay order brought Amazon to the Supreme Court in appeal.
Amazon and the Future Group locked horns after the American e-commerce giant invoked arbitration. The move was prompted by Future Group’s listed company – Future Retail Ltd – announcing an asset sale deal valuing around Rs 27,000 crore with Reliance Industries’ wholly owned subsidiary Reliance Retail.
The asset sale deal between the two leading retail players in India was a result of Future Retail running into losses owing to the reduced business for brick-and-mortar retail stores due to the pandemic.
Amazon claimed to have the first right in Future Group’s retail business on account of the 2019 investment deal with Future Coupons. Amazon claimed that the agreement also barred Future Group from entering into business with certain entities which included the Mukesh Dhirubhai Ambani Group. This caused Amazon to invoke arbitration on the announcement of the asset sale deal between Future Group and Reliance.
The dispute between Amazon and Future Group has developed into a convoluted web of litigation ever since.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
