Amazon Vs Future Retail Day 2: Arguments On Enforcement Of Emergency Arbitrator’s Award
Amazon.com Inc. signage is displayed in front of a warehouse in the Staten Island borough of New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Amazon Vs Future Retail Day 2: Arguments On Enforcement Of Emergency Arbitrator’s Award

The second day of Amazon.com NV Investment Holdings Vs Future Retail Ltd. litigation in the Supreme Court saw both sides argue the question of maintainability.

Specifically, over whether Future Group could have approached the high court division bench for a stay against the enforcement order passed by the high court bench of Justice JR Midha.

Amazon said Future Group couldn't have approached the high court’s division bench to seek a stay on the enforcement of the emergency arbitrator’s award.

The Singapore based emergency arbitrator‘s October 2020 order put on hold the Rs 27,513-crore transaction between Future Retail and Reliance Retail Ltd. The transaction included the sale of Future Retail‘s retail, wholesale, logistics and warehousing assets to Reliance Retail.

The Delhi High Court in March found the award of the emergency arbitrator to be valid and capable of being enforced by Indian courts.

Against this order, Future Retail approached the division bench which stayed the operation of the single judge bench order. Subsequently, the case landed in the top court.

The arguments today were on maintainability of the appeal before the division bench.

Amazon Says Enforcement Order Couldn't Have Been Appealed

Senior Advocate Gopal Subramanium argued that Future Retail couldn't have filed an appeal against the order of enforcement by the single judge bench of the high court.

Subramanium said the emergency award is covered under Section 17 of the Arbitration and Conciliation Act, 1996, and the appeal against orders passed under this section can be filed as per Section 37.

Section 37 allows for any appeal against the interim order of a tribunal recognised under Section 17 of the act.

In this case, Subramanium argued, the award of the emergency arbitrator wasn't challenged in any court by Future Group companies.

That being the case, there couldn't have been a challenge to the enforcement order passed by the single judge bench, Subramanium said.

However, Sumbramanium added, Future Retail declared the award to be a nullity even when it was a valid award under the Indian law.

Earlier, Subramanium defended the validity of the emergency arbitrator’s order and told the court that there is no provision in the Arbitration Act that says there cannot be an emergency arbitrator.

How can it be that no one filed an appeal and the order stands but it can still be flouted, asked Subramanium.

The arbitration tribunal set up in Singapore last week heard the plea seeking the vacation of the emergency arbitrator’s order. The tribunal also heard arguments on whether Future Retail can be made a party in the arbitration proceedings between Future Coupons Pvt. and Amazon.

Salve told the bench that the order of the tribunal would be out in a few days.

Salve argued that depending on the tribunal‘s ruling on the injunction on the transaction either of the parties have the option of filing the appeal under Section 37 of the Arbitration Act.

Future Retail also told the bench that as per them the order of the emergency arbitrator is not covered under the definition of interim award of a tribunal under Section 17.

Salve also added that Section 37 did not bar any appeals under the course of execution of an award.

Harish Salve was midway in his arguments when the bench rose for the day. The hearing in front of Justice Rohinton F Nariman and Justice BR Gavai will continue on Tuesday.

Future Retail Vs Amazon: Story So Far

Amazon.com NV Investment Holdings LLC has alleged that the Rs 27,513-crore deal between Reliance Retail and Future Group violates its contractual rights.

In 2019, Amazon had invested in Future Group by acquiring a 49% stake in Future Coupons Ltd.—a promoter entity of Future Retail. Future Coupons holds 9.82% in Future Retail. At the time, Future Coupons and Future Retail had also entered into a shareholders’ agreement.

Subsequently, Future Retail entered into an agreement with Reliance Retail to sell its retail, wholesale, logistics and warehousing assets.

In October last year, the emergency arbitrator granted an interim award in favour of Amazon. It had directed Future Group to put on hold its transaction with Reliance Retail.

In February, the apex court had agreed to hear the matter after the division bench of the Delhi High Court lifted the status quo on Future-Reliance deal.

The division bench order was passed after Future Retail appealed against the single judge bench‘s interim order of status quo while hearing Amazon's enforcement application on the emergency arbitrator’s order.

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