In a significant setback to the Future group, the Delhi High Court has dismissed the pleas filed by the Future group companies relating to termination of arbitration proceedings with Amazon going on before the Singapore International Arbitration Centre.
Kishore Biyani’s Future group had approached the Delhi High Court seeking direction for the Singapore tribunal to hear termination application ahead of the scheduled hearings in the arbitration case.
Future group’s case hinged on the December 2021 order of the Competition Commission of India which had kept in abeyance its approval for the 2019 investment deal between Amazon and Future Coupons Pvt Ltd, a promoter firm of the group’s public listed company Future Retail Ltd.
While Future group argued that with the CCI approval now suspended, the agreement which provided for the arbitration proceedings itself is rendered invalid. As such, the ongoing proceedings, too, would be irrelevant. Amazon contested this stand by saying that arbitration and the underlying contract are independent of each other. Moreover, Amazon said it has legal options, such as appeals, available against the CCI order.
The case was heard for about three hours on January 3 owing to the urgency in the case cited. The court reserved its order to be delivered on the following day, just ahead of the scheduled dates set out by the Singapore International Arbitration Centre for its meeting to carry out the arbitration proceedings in the case.
The tribunal is set to meet between January 5 and 7 to proceed with the arbitration case hearings on the aspect of affixing quantum of damages that the Future group would be liable to pay to Amazon.
Earlier, in a partial award passed by this tribunal in favour of Amazon, the panel found Future Retail Ltd to be a valid related party to the contractual arrangement entered into between Amazon and Biyani-led Future Coupons. Pursuant to this, the tribunal is now tasked with ascertaining the quantum of liability.
Meanwhile, the order by CCI suspending its approval came to be passed which the future group relied upon in its attempt to have the arbitration proceedings terminated altogether. The Future group petitioned the Singapore tribunal for the same but to no avail.
This plea by Future group had made its way to the high court after the Singapore tribunal was unable to accommodate this termination application ahead of the scheduled hearings on main case. Calling this “defiance of Indian law” and “defiance of the CCI order”, the counsel for Future group made a fervent case for the arbitration to be terminated.
The legal battle between Amazon and Future began back in 2020 when Amazon invoked arbitration after Future Retail announced its asset sale deal with Reliance Industries Ltd’s wholly owned subsidiary, Reliance Retail. Amazon claimed that its deal with Future Coupons prevented Future Retail also, in capacity of related party, from entering into agreements with certain entities including the Mukesh Dhirubhai Ambani group. Future Retail claimed that it was not bound by the deal between Amazon and Future Retail’s promoter firm.
The asset sale deal between India’s two leading retailers was stayed by an emergency arbitrator in October 2020 and the validity of this order was finally affirmed by the Supreme Court in August 2021. While this merger remains stayed, Future group firm moved CCI accusing Amazon of withholding pertinent information leading to the CCI order of December which has now become basis for a fresh round of litigation.
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