The Supreme Court on Wednesday directed Amazon and Future Retail (FRL) to approach the Singapore tribunal for restarting the arbitration proceedings over the e-commerce firm’s dispute with the Kishore Biyani company’s Rs 24,500-crore merger deal with Reliance Retail.
However, the apex court said that the tribunal should first hear FRL’s application for terminating the arbitration proceedings. This is because the Competition Commission of India (CCI) in December 2021 suspended its earlier approval to Amazon for acquiring a 49% equity in a Future Group entity. FRL had subsequently argued that since Amazon had based its first right of refusal over any asset sale by it on this acquisition, the arbitration becomes null and void.
Taking note of the consent terms submitted by Amazon and Future group over the resumption of arbitral proceedings before the Singapore International Arbitration Centre (SIAC), the bench led by Chief Justice NV Ramana said that “the parties will approach the tribunal to resume arbitral proceedings and the tribunal will consider the FRL’s termination application under Section 32(2) (c) of the Arbitration and Conciliation Act on priority and pass orders.” The provision provides for passing an order if the “arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.”
“I hope we don’t have to hear this case again,” the CJI said in a lighter vein at the close of the hearing.
The top court also transferred Amazon’s application seeking to restrain FRL from alienating its assets to the HC, presided by Justice Hari Shankar, who is already hearing the case. The application was filed in the wake of more than 830 FRL’s stores being taken over by Reliance Retail.
The tribunal had rescheduled its hearing in the arbitration case for May after the Delhi High Court had on January 5 stayed its proceedings citing the CCI suspension order.
The spat between Future Group and Amazon has been on since October 25, 2020, when Singapore’s EA passed an interim order restraining FRL from going ahead with its deal with Reliance Retail. The two sides have been embroiled in a legal battle over Future Retail’s move to sell its retail assets to Reliance Retail for Rs 24,500 crore. Amazon, which had acquired an indirect minority stake in Future Group in 2019 for Rs 1,400 crore, has alleged that Future’s sale of its retail, wholesale, logistics and warehousing businesses to Reliance Retail breached its pre-existing contract, which included a right of the first offer and a non-compete clause.
