SC rules in favour of Amazon in dispute with Future Retail
A two-judge bench of the Supreme Court of India ruled in favour of Amazon.com NV Investment Holdings in its case against Future Retail.
The dispute concerns Future Retail’s attempt in August 2020 to amalgamate its assets, and sell a minority stake of Future Retail (FRL) to Reliance Retail Ventures after the onset of the pandemic.
However, FRL was prohibited from disposing its retail assets to ‘restricted persons’, which included Mukesh Ambani. This was stated in the shareholder agreement when Amazon.com NV Investment Holdings infused Rs 1,431 crore in Future Coupons (FCPL) in 2019.
On October 5, 2020, Amazon initiated arbitration proceedings for emergency interim relief under the Singapore International Arbitration Centre (SIAC) Rules to block the deal between Future Retail and Reliance Retail Ventures.
The Emergency Arbitrator passed an ‘interim order’ dated October 25, 2020, which stalled the deal.
On Friday, India’s apex court said the order that SIAC passed is valid in India under Section 17 (1) of Arbitration and Conciliation Act, 1996.
“We welcome the verdict of the Hon’ble Supreme Court of India upholding the Emergency Arbitrator’s award,” an Amazon spokesperson told EnterpriseStory. “We hope this will hasten a resolution of this dispute with Future Group.”
“FRL intends to pursue all available avenues to conclude the deal to protect the interests of its stakeholders and workforce,” Future Retail stated in a stock exchange filing after the Supreme Court judgement.
“The judgement addresses two limited points related to the enforceability of the Emergency Arbitrator’s order and not the merits of the disputes,” Future Retail added in the BSE filing.
On February 2, a single judge of the Delhi High Court had restrained Future Retail’s deal with Reliance Retail Ventures. The judge, in a February 8 order, held that the SIAC award was enforceable as an order under the Arbitration Act, and that Future Retail had flouted it.
But a division bench of the Delhi High Court stayed this judgement in March. Following this, special leave petitions were filed, and the dispute came up before the Supreme Court of India.