Delhi High Court Rejects Approval For Future-Reliance Deal, Upholds Amazon's Plea

OVERVIEW

• The Delhi High Court had asked the US e-commerce giant Amazon and Kishore Biyani-led Future Retail Ltd. if they are willing to resolve their issues regarding the Rs. 24,713-crore deal between Reliance Retail and Future Retail.
• The Court addressed the plea filed by Amazon seeking directions to uphold the award pronounced by SIAC'S Emergency Arbitrator, which restrained Future Group from signing a deal with Reliance Retail.
• The plea was filed by Amazon.com NV Investment Holdings LLC against Future Coupons Pvt. Ltd., Future Retail Ltd., &Ors. to restrain them from alienating, disposing, transferring its assets.

 ISSUES BEFORE THE COURT

• Justice J.R. Midha asked both parties if they would be open to resolve issues and ordered that the proceedings of the said case would continue as scheduled. The Court assured that if both parties agree to this, the matter can be referred to two retired judges of the Supreme Court. Counsels representing both parties said that they would inform the court after seeking due instructions.
• The Delhi High Court earlier had issued a notice on Amazon's plea seeking interim injunction against the deal between Future Retail and Reliance Industries, and had also directed the parties to submit a note regarding their factual positions and legal propositions in the previous hearing.
• Senior Advocate Darius Khambata, counsel for Future Retail, had contended that even under the SIAC Rules, the Emergency Arbitrator is not the tribunal, and further mentioned that the single-judge bench order of Justice Mukta Gupta had nowhere held that the Emergency Arbitrator's award was not enforceable under sec. 17 of the Arbitration & Conciliation Act, 1996.
• However, objecting to the respondent's claim, Senior Advocate Gopal Subramanium, appearing on behalf of Amazon, today submitted that Future Retail is not liable to unilaterally declare an otherwise valid award as nullity qua for itself, when the arbitration award was still binding to all the other parties included in the agreement.
• After hearing the plea made by Amazon Inc. against Future Retail and Reliance Industries' retail stake sale deal, the Delhi High Court yesterday, granted interim relief to Amazon, directing authorities and parties to maintain status quo on the deal until the detailed interim order is pronounced.

CONCLUSION 

• The bench posed a strong prima facie view in the plaintiff's favour, observing that the Emergency Award by SIAC is, in fact, enforceable by the Indian law under sec. 17 (2) of the Arbitration & Conciliation Act.
• The Court thus directed FRL to bring on record all measures undertaken towards the deal, after the award was passed by the Emergency Arbitrator on October 25, 2020.

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