Amazon-Future deal: SC to hear Amazon’s plea next Friday against Delhi HC proceedings
Appearing for Future, senior advocate KV Vishwanathan opposed the application on the ground that the high court already reserved orders on one petition after hearing the two sides
The Supreme Court on Thursday told Future Group that proceedings initiated by it before the Delhi high court cannot “stultify” the ongoing international arbitration with US e-commerce giant Amazon.com NV Investment Holdings LLC, and agreed to list next week an application by the latter seeking a stay on the high court proceedings.
“You (Future Group) cannot keep on stultifying the proceedings before the arbitral tribunal. This is a ploy to delay those proceedings,” the bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud said, taking a grim view of the proceedings initiated by Future Retail Limited (FRL) and its promoters in the high court, seeking termination of the arbitral proceedings initiated by Amazon at the Singapore International Arbitration Centre (SIAC).
Amazon, represented by senior advocate Gopal Subramanium, informed the apex court that Future group sought termination of the tribunal proceedings through two separate petitions filed before the Delhi HC, and challenged the amendments carried out by the US e-tailer to the statement of claims, including monetary damages in the SIAC proceedings. He further cited the order passed by the Supreme Court on April 6 recording the consent of both sides while ordering arbitration proceedings to go on.
With the tribunal expected to hear the matter next on November 28, Subramanium expressed apprehensions that the high court proceedings may be a “ploy” by Future group to delay the tribunal hearing. He pointed out that the tribunal had in a detailed order shot down Future’s plea to terminate proceedings.
Appearing for Future, senior advocate KV Vishwanathan opposed the application on the ground that the high court already reserved orders on one petition after hearing the two sides. “The cause of action for us to approach the high court arose after the SC’s April 6 order since Amazon later moved amendments confining to monetary damages. Better course is to direct the high court to pronounce its judgment. The proceedings before the tribunal will depend on the outcome of this judgment.”
The SC bench, also comprising justices Hima Kohli and JB Pardiwala said, “Your client is acting too clever by the half. These are ploys by well-healed parties to defeat arbitration. This we will not allow.” The court also noted that it had a duty to ensure the April 6 order is implemented. “We are concerned that the order passed by this court should not be made a nullity.”
At the same time, the bench reminded the parties that the sanctity of international tribunals should be kept and Indian courts should not be seen as interdicting such processes. “On one hand we speak of Global India and on the other hand, this is how dark clouds are cast over arbitration law in international forum.”
The top court directed Amazon’s application to be listed on November 25. Vishwanathan urged the court to request the high court to pronounce its order by then. The bench said, “We cannot put pressure on the judge. We will say subject to the decision by the high court, you will not seek time before the tribunal.”
Future group said such an anticipatory order will create an “unhealthy precedent”. The court noted that as of date, there is no stay on the tribunal process and assured to take up the matter next week.
Amazon had entered into an agreement with Kishore Biyani-led Future group for takeover of its retail assets in 2019. The US major invested ₹1,431 crore in Future group. In August 2020, Reliance entered into the fray by signing a deal for a proposed $3.4 billion merger of Future assets. Amazon group pursued arbitration before the SIAC and obtained an emergency award in October 2020 to block the Future-Reliance deal.
In December 2021, the Competition Commission of India (CCI) revoked its permission allowing the Amazon-Future deal and imposed a penalty of ₹202 crore on Amazon. This order was challenged by Amazon before the National Company Law Appellate Tribunal.
On a petition moved by Future Retail, the Delhi high court on January 5 stayed the arbitral proceedings. It was against this order the April 6 judgment was passed by the top court setting aside the HC order and directing resumption of arbitral proceedings. The top court had also asked SIAC to first consider Future group’s application seeking termination of proceedings in the light of CCI order.