Arguing that the power of the state is needed to enforce the arbitral award by any tribunal, Future Retail has questioned the applicability of last year’s order by a Singapore-based Emergency Arbitrator (EA) which had stalled its deal with Reliance Group.
Appearing for Future Retail, senior lawyer Harish Salve argued that the extent to which a tribunal can assume the power of the state or be treated as a court remains subject to the country’s legislative policy, while pointing to numerous past verdicts by the top court to explain his stand. Terming the EA’s order as a “nullity” in absence of an arbitration agreement, he claimed that there is no notion of an EA under Indian law.
Salve submitted that once arbitration ends with passage of an award, it’s the Code of Civil Procedure (CPC) and not the Arbitration Act which applies, maintaining that enforcement of an arbitral award has to take place under CPC and not the Arbitration Act. Referring to the SIAC (Singapore International Arbitration Centre) Rules, he argued that they don’t allow EAs to decide on the merits of a case. Rather, he claimed that an EA order’s shelf life is 90 days as per SIAC Rules, and it lapses automatically if a tribunal isn’t set up in the meantime.
While the 2-judge bench led by Justice RF Nariman observed that it will decide the issue of maintainability,l of Amazon’s appeal and whether the EA order is enforceable or not, Future Retail maintained that it is up to the Parliament to decide where to accommodate EAs under Indian law. Accusing Amazon of committing a tort of unlawful interference by blocking its deal with the Reliance Group, Future Retail claimed that many international awards aren’t recognised worldwide and opposed the applicability of the EA order in India. The court will continue hearing in this case tomorrow.
Amazon’s appeal has claimed that Future Retail’s proposed deal with the Reliance Group is in fundamental violation to the core understanding of Amazon’s investments with the Future Group. Amazon submitted that it had invested Rs 1,431 crores with Future Coupons in 2019 with the understanding that Future Retail won’t transfer or sell its retail assets to “restricted persons”, including the Reliance Group, without Amazon’s consent.
On 25th October 2020, a Singapore-based Emergency arbitrator had halted the Rs. 27,513 crore Future Retail-Reliance Group deal which has led to multiple litigations across various courts in India.
Here is a timeline of the case till now:
- 29th August 2020: Future Retail passed board resolution to proceed with Reliance deal
- 25th October 2020: Singapore based emergency arbitrator halted Future Retail-Reliance Group deal
- 20th November 2020: CCI gave nod to Future Retail-Reliance Group deal
- 21st December 2020: Single-judge bench of Delhi High Court refused to stay deal, upheld August 29 board resolution, allowed Amazon to write letters to regulators, upheld Future Retail’s claim of tortious interference by Amazon
- Jan 2021: SIAC constituted 3-member panel to pass final verdict
- 13th January 2021: Delhi High Court’s division bench issued notice to Future Retail on Amazon’s plea against Dec 21 order which allowed regulators to decide
- 20th January 2021: SEBI gave nod to Future Retail-Reliance Group deal
- 2nd February 2021: Single-judge bench of Delhi High Court ordered status quo on Future Retail-Reliance Group deal
- 3rd February 2021: Future Retail contested status quo order before 2-judge bench
- 8th February 2021: Delhi HC’s division bench set aside single-judge order, allowed deal to proceed
- 22nd February 2021: SC admitted Amazon’s appeal against HC nod to deal, stayed final amalgamation till further orders.
