Delhi HC puts on hold arbitration proceedings between Amazon and Future
Delhi High Court on Wednesday halted Future Group’s ongoing arbitration with estranged partner Amazon.com Inc in light of an Indian antitrust agency’s suspension of a 2019 deal between the two sides.
The US company successfully used the terms of its 2019 investment in a Future unit to block the Indian retailer’s attempt to sell retail assets to rival Reliance Industries, alleging breach of certain contracts.
But after the antitrust agency suspended the 2019 deal last month citing supression of information by Amazon while seeking clearances, Future argued there was no legal basis for the arbitration between the two sides to continue.
A two-judge bench of the Delhi High Court on Wednesday agreed with Future’s arguments, putting the arbitration proceedings on hold and also stayed order of the single judge of Delhi High Court.
Future Retail and its promoters had earlier on Wednesday filed appeals before the division bench of the Delhi High Court challenging the order passed on Tuesday that dismissed the Group’s petitions for termination of the Amazon arbitration.
The Delhi High Court on Tuesday dismissed the pleas moved by Future Group companies seeking a direction to the arbitration tribunal, adjudicating Amazon’s objections against Future Group’s deal with Reliance, to take a decision on their application for terminating the arbitration proceedings before moving any further.
The Singapore International Arbitration Center (SIAC) is adjudicating Amazon’s objections against Future Group’s Rs 24,713 crore deal with Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd.
On Tuesday, the single-member bench of Justice Amit Bansal, said it was not for the court to interfere with the scheduling of the arbitration proceedings and no grounds for interference were made out in the present petitions.
He said the tribunal has already fixed January 8, as the date for hearing the termination application after cutting short the scheduled four days’ hearing of the expert witnesses.
Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, arguing that FRL had violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani’s Reliance Retail on a slump sale basis for Rs 24,500 crore.
In December, the Competition Commission of India (CCI) suspended its over-two-year-old approval for Amazon’s deal to acquire a 49-per cent stake in Future Coupons Pvt Ltd (FCPL), FRL’s promoter, and also slapped a penalty of Rs 202 crore on the e-commerce major.
Amazon is objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008, and is engaged in the business of marketing and distribution of gift cards, loyalty cards and other reward programmes to corporate customers.
Several issues arising from the Amazon-Future legal battle are pending before the Supreme Court.
Reliance Retail Ventures, had for the second time – extended the timeline for completing its Rs 24,713 crore deal with Future group to March 31, 2022 as it still awaits regulatory and judicial clearances.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
