Big win for Amazon after top court halts Future-RIL deal
The apex court held that an award of an EA of another country is enforceable under the laws in India
COURT SAID THE SINGAPORE-BASED EMERGENCY ARBITRATOR WAS ENFORCEABLE UNDER INDIAN LAW
NEW DELHI: In a major victory for e-commerce giant Amazon, the Supreme Court on Friday ruled that Future Group is bound by an emergency award that has restrained it from a $3.4 billion sale of retail assets to Mukesh Ambani’s Reliance Industries Ltd (RIL).
A bench of justices Rohinton F Nariman and BR Gavai held that the Singapore-based Emergency Arbitrator (EA) award, passed in October 2020, was enforceable under the Indian arbitration law and will bind Kishore Biyani-led group of companies being a party to pertinent agreements with Amazon.
“A party cannot be heard to say, after it participates in an Emergency Award proceeding, having agreed to institutional rules made in that regard, that thereafter it will not be bound by an Emergency Arbitrator’s ruling,” said the bench while allowing the petitions filed by Amazon which is engaged in a legal wrangle with RIL for domination of the Indian retail market.
In its 103-page judgment, the top court noted that “it cannot lie in the mouth of a party to ignore an Emergency Arbitrator’s award by stating that it is a nullity when such party (Future Group) expressly agrees to the binding nature of such award from the date it is made and further undertakes to carry out the said interim order immediately and without delay.”
A spokesman for Amazon said, “we hope this will hasten a resolution to the dispute.” A spokesperson for Reliance didn’t immediately comment.
Future Retail said in an exchange filing Friday it will pursue all available avenues and legal remedies to conclude the deal and protect investors and workers.
NEW DELHI: The Supreme Court on Friday ruled in favour of US-based e-commerce giant Amazon by holding that Singapore’s Emergency Arbitrator (EA) award, restraining the ₹24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail, was valid and enforceable under Indian laws.
A bench of Justices R F Nariman also dealt with the larger question and as a proposition of law, held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.
FRL had argued that an EA is not an arbitrator under the Indian law as the term does not find any mention in the statute here.
“The EA Order is an order within section 17 (1) and can be enforced under Section 17(2) of the Arbitration and Conciliation Act,” it said. Pronouncing the verdict, Justice Nariman said the top court has agreed with the findings of the single-judge of the Delhi high court which had found the EA award in favour of the US firm to be enforceable in India. Amazon.com NV Investment Holdings LLC and FRL are embroiled in a bitter legal fight over twhe deal and the US-based firm has sought in the apex court that the EA award was valid and enforceable.
While the two companies did not immediately comment on the judgment, a legal expert who did not wish to be named, said that Future Retail is expected to file a review plea against the order and an appeal under section 37 (20) of the Arbitration Act against the EA’s interim award before the Delhi high court to obtain appropriate relief to pursue its deal with Reliance.
The judgment, he said, does not deal with the merits of the dispute between FRL and Amazon. It has dealt with the questions of law which are academic in nature.
The judgment has held that the interim award of SIAC emergency arbitrator is a binding order under section 17(1) of the Arbitration Act, he added.
The top court had reserved the judgment in the high profile case on July 29 after hearing battery of lawyers including senior advocates Harish Salve and Gopal Subramanium, appearing for FRL and Amazon respectively. “We will decide whether EA award falls under section 17 (1) (which deals with interim award by arbitral tribunal) of the Arbitration and Conciliation Act. And if yes, then whether it can be enforced under section 17 (2) (of the Act),” the bench had said. The provisions of the Act deal with the interim measures ordered by an arbitral tribunal and section 17 (1) says: “Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.” Section 17 (2) provides that the arbitral tribunal may require a party to provide appropriate security in connection with an interim measure ordered.