Delhi HC rejects Future's plea for termination of Amazon arbitration

Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre in Oct 2020

The Delhi High Court on Tuesday dismissed the pleas moved by Future Group companies seeking a direction to the arbitration tribunal, which is adjudicating on Amazon's objections against their deal with Reliance, to take a decision on their application for the termination of the arbitration proceedings before moving any further.

"Both the petitions are dismissed," said Justice Amit Bansal, who had reserved the order on the petitions filed by Future Coupons Private Limited (FCPL) and Future Retail Limited (FRL) on January 3.

The judge said the orders would be uploaded on the website of the high court shortly.

Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, arguing that FRL had violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani's Reliance Retail on a slump sale basis for Rs 24,500 crore.

Senior advocate Mukul Rohatgi, appearing for FCPL, had argued before the high court that the three-member arbitration tribunal was acting perversely by not deciding the issue of termination of the ongoing arbitration on a priority basis in view of the anti-trust regulator holding that the approval granted to Amazon for its agreement with FCPL, which formed the basis of the arbitration, was facilitated by fraud.

In December, the Competition Commission of India (CCI) suspended its over-two-year-old approval for Amazon's deal to acquire a 49-per cent stake in FCPL, FRL's promoter, and also slapped a penalty of Rs 202 crore on the e-commerce major.

Appearing for FRL, senior advocate Harish Salve had submitted that the tribunal, which is scheduled to hear issues concerning damages from January 5 to January 7, should first take up the termination application and defer the proceedings on other issues.

Senior advocates Gopal Subramanium and Amit Sibal, appearing for Amazon, had argued that there was no denial of equal treatment by the tribunal, which has scheduled the termination application for hearing on January 8, and contended that the tribunal has the discretion to conduct its own proceedings.

Amazon is objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008 and is engaged in the business of marketing and distribution of gift cards, loyalty cards and other reward programmes to corporate customers.

In October last year, the high court had declined to stay the arbitration tribunal order refusing to interfere with the Emergency Award (EA), which restrained Future Group from going ahead with the deal with Reliance.

Several issues arising from the Amazon-Future legal battle are pending before the Supreme Court.