Singapore tribunal junks Future’s arbitration petition
Anirudh Laskar and Priyanka Gawande
MUMBAI: The Singapore International Arbitration Centre (SIAC) on Tuesday rejected a Future Group plea seeking termination of arbitration proceedings on the grounds that India’s antitrust regulator kept its approval for the Amazon-future partnership in abeyance, two people directly aware of the development said.
In its order, SIAC said it would continue with the arbitration proceedings that began in October 2020 after Future Group proposed to sell its retail, wholesale and logistics assets to Reliance Industries Ltd for ₹24,713 crore ($3.2 billion). In April, Reliance called off the deal after Future Retail Ltd’s creditors rejected the proposal. Mint has reviewed a copy of the SIAC order.
“The tribunal finds that the continuation of these proceedings has not been rendered unnecessary or impossible under Section 32(2)(c) of the Arbitration Act. Accordingly, there is no ground for the termination of these proceedings under the Arbitration Act,” presiding arbitrator Michael Hwang S.C.’S order said.
Future Retail argued that there was no basis for the tribunal to continue with the arbitration since the approval for the agreement based on which Amazon approached SIAC has been kept in abeyance by the Competition Commission of India (CCI). The 2019 agreement between Amazon and Future Coupons Pvt. Ltd, a promoter entity of Future Retail, has been kept under suspension by CCI for alleged suppression of facts. Amazon has challenged the CCI’S order.
SIAC said even if FRL discontinues to be a party to the arbitration proceedings, all other Future Group entities must be under arbitration proceedings even if an insolvency case is initiated in India. Future Retail’s largest lender, Bank of India, filed a case under the Insolvency and Bankruptcy Code after the company defaulted on payments. Future Group owes about $3 billion to at least 28 creditors.
The tribunal said its order takes cognizance of a live contract because of which investment flowed into the company (Future Retail), and in that contract, there was no suppression of facts. “The SIAC order means the surrendering of Big Bazaar stores to RIL by FRL is not legitimate and can attract severe penalty if those assets are not brought back,” one of the two people cited above said.
SIAC SAID IT WILL CONTINUE WITH THE ARBITRATION PROCEEDINGS THAT BEGAN IN OCTOBER 2020