Amazon, Future agree to appear before SIAC

The Supreme Court on Monday revived arbitration in the ongoing corporate battle between Future Group and Amazon Inc and allowed the latter to pursue before the Delhi high court, its efforts to restrain Future from alienating its assets by surrendering them to the Reliance Group .

A bench headed by Chief Justice of India (CJI) NV Ramana passed the order on an application by Amazon which accused Future Retail Limited (FRL) of rendering the arbitration futile by surreptitiously allowing its assets to come under the control of Reliance which signed an agreement in August 2020 for a proposed $3.4 billion takeover of Future’s retail assets.

That deal frustrated an earlier agreement of 2019 entered between Amazon and Future following which the American entity invested ₹1,431 crore in Future group. The company pursued arbitration before the Singapore International Arbitration Centre (SIAC) and obtained an emergency award in October 2020, blocking the Future-Reliance deal. The validity of this award is pending consideration before the Delhi high court. At stake is the prized Indian retail market.

The bench, also comprising justices Krishna Murari and Hima Kohli noted that no effective order could be passed on Amazon’s plea as the same was filed in an appeal by the US company challenging the Delhi HC’s January 5 order staying the SIAC proceedings.

Amazon requested the Court for resuming the arbitration by the next available date beginning April 18 and a direction not to allow FRL’s retail stores be taken over by Reliance.

The top court said, “We direct both parties, who have agreed to appear before the arbitral tribunal, to file a joint memo within a day and request the tribunal to expedite the hearing on the issues before it.”

Future Group opposed Amazon’s application claiming that similar request was raised by the other side before the high court as well, which was considering the same. On being told that the high court will convene again on Tuesday, the top court directed Amazon to pursue its application pending in the HC and posted the case for further orders on Wednesday.

Senior advocate Harish Salve appeared for Future Group while Amazon was represented by senior advocates Gopal Subramanium and Ranjit Kumar. Subramanium claimed that a single judge of the HC had declined their prayer to hear the application as Future filed a separate plea to allow the NCLT to proceed with its deal with Reliance. Salve submitted to the Court that the company faced serious financial crisis as due to failure to pay lease rent, 835 of its retail stores had been taken over by RIL. Future claims it now has 374 stores which Salve described were “hanging by a thread” as the firm has no money to pay rental dues and loans amounting to ₹5000 crore.

Meanwhile, Subramanium said FRL made statements to Court that its assets would not be disposed pending arbitration proceedings.