The Delhi High Court, where the matter was heard by Justice Mukta Gupta, summoned Amazon, Future Coupons Pvt Ltd (FCPL) and Reliance Retail Ltd (RRL) on the FRL (Future Retail Ltd) suit, asking them to file written statements within 30 days, according to Salman Waris, managing partner at technology law firm TechLegis Advocates and Solicitors, who analysed Tuesday’s court proceedings.
Senior advocate Harish Salve, who appeared for retail conglomerate Future Group, told the court that the prayer in the suit is anti-arbitration and he didn’t want Amazon to interfere with the transaction with Reliance, according to the information on law platforms Bar & Bench and Live Law.
Salve said Amazon, which came to invest in India had a limitation as, under Indian law, foreign direct investment (FDI) in the multi-retail brand is not allowed. He said Amazon invested in Future Coupons Ltd (FCL) which has a shareholder agreement with Future Retail. But Amazon has no control over Future Retail.
He said that retail trade was impacted in the first lockdown and FRL shares were hit hard. Future founder Kishore Biyani
was negotiating with Reliance as early as June 2020, otherwise, he would have lost everything. He said Amazon knew about it and it is false information that the firm didn’t have knowledge about it till September this year. He said that Amazon is writing to the Competition Commission of India (CCI) and Securities and Exchange Board of India (Sebi) and pressed for an ad interim injunction against the e-commerce giant to stop it from writing to statutory bodies, according to Bar & Bench and Live Law. Salve told the court to not allow the “American giant” (Amazon) to kill Future,
Amazon in its letter to SEBI had claimed that Future had hidden information about the deal. “As part of the deal, Amazon had 'call' option, which enabled it to exercise the option of acquiring all or part of Future Coupon's promoter, Future Retail's shareholding in the company, within 3-10 years of the agreement,” said Salman Waris, managing partner at law firm TechLegis Advocates and Solicitors, who analysed Tuesday’s court proceedings.
Senior advocate Mukul Rohtagi appeared for the Future promoters (Biyanis). According to Bar & Bench and Live Law, he said the arbitration has to be in Delhi and the law in the country does not contemplate emergency arbitration. He said Amazon had the call option to put in more money in the company but they didn't. He said the transaction with Reliance was not clandestine.
Senior advocate Abhishek Manu Singhvi who appeared for Reliance said emergency arbitration doesn't exist in India and the court is dealing with a concept which is alien to Indian law. He said it had to be an India based arbitration.
“While it is true the emergency arbitration may be an alien concept to Indian law however the argument that FDI is not allowed in multi-brand retail in India can not ideally be interpreted to have bearing on a contractual agreement between two parties and the same has also been rejected by the SIAC (Singapore International Arbitration Centre) Arbitrator,” said Waris of TechLegis about the court proceedings.
Amazon, which was represented by senior advocate Gopal Subramanium argued that parties had agreed that arbitration will take place as per the Singapore International Arbitration Centre (SIAC) rules. He said Amazon is an investor and the law gives it protective rights. He referred to the ArcelorMittal case, where the Supreme Court said that there are investor protection rights.
This whole case follows a dispute over Future’s sale of its retail and wholesale businesses to RIL. Last year in August, Amazon bought a 49 per cent stake in Future Coupons for Rs 1,430 crore. This year in October, Amazon had sent the legal notice to Future, alleging the retailer’s Rs 24,713-crore asset sale to RIL breached an agreement with the American e-commerce giant.
Last month an emergency arbitration hearing between Amazon and Future Group took place under Singapore International Arbitration Centre (SIAC) rules. The matter was heard by former Singapore attorney general V K Rajah. He was the sole arbitrator in the case, in which Amazon won a favourable ruling.
Box: The day’s highlights:
. The Delhi High Court heard Future Retail's suit against Amazon.
. The matter was related to the interim order passed by an Emergency Arbitrator in Singapore.
. The court adjourned the hearing until Wednesday after a day-long hearing.
. Summons issued to Amazon, Future Coupons Pvt Ltd (FCPL) and Reliance Retail Ltd (RRL) on the FRL (Future Retail Ltd) suit.
. They have been asked to file written statements within 30 days.
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