Amazon in Supreme Court: Future can’t ignore arbitrator’s order

By: |
July 21, 2021 4:40 AM

The company said subsequent to disregarding the EA's interim order, Future Group is “trying to camouflage its weak arguments” by using the word “nullity again and again”.

Amazon said Rule 12, Schedule I of the SIAC Rules provides that orders/directions passed by an EA are not only binding but parties must undertake to “immediately and without delay” comply with such orders/directions.Amazon said Rule 12, Schedule I of the SIAC Rules provides that orders/directions passed by an EA are not only binding but parties must undertake to “immediately and without delay” comply with such orders/directions.

Amazon on Tuesday told the Supreme Court that Future Group deliberately chose to ignore and disregard Singapore’s emergency arbitrator’s (EA) order restraining it from going ahead with its deal with Reliance Retail. The company said subsequent to disregarding the EA’s interim order, Future Group is “trying to camouflage its weak arguments” by using the word “nullity again and again”.

Opening its arguments before a bench led by Justice RF Nariman, senior counsel Gopal Subramanium, appearing for Amazon, argued that there is no provision in the Arbitration and Conciliation Act that prohibits the concept of an EA and the law gives complete freedom to parties to choose the venue of arbitration and order of EA is binding on all the parties except the arbitral tribunal.

“This is because the emergency arbitrator and members of the fully constituted arbitral tribunal enjoy the same status as that of an arbitrator. Current international arbitration practice confirms this position,” Subramanium argued, adding that by opting for the Singapore International Arbitration Centre’s (SIAC) Rules, all the parties agreed to abide by all the provisions, including one relating to EA.

Amazon said Rule 12, Schedule I of the SIAC Rules provides that orders/directions passed by an EA are not only binding but parties must undertake to “immediately and without delay” comply with such orders/directions.

The fight between Future Group and Amazon has been going on since October 25, 2020, when the Singapore’s Emergency Arbitrator passed an interim order restraining Future Group from going ahead with its deal with Reliance Retail. The SIAC last week concluded its hearing on the plea filed by Amazon against the `24,713-crore deal between Future Group and Reliance Industries.

The SC had in April stayed all the proceedings before the Delhi High Court related to the enforcement of the Singapore’s Emergency Arbitrator’s interim award against the deal. The matter was simultaneously going on in the SC and before different benches of the Delhi HC, something which has now stopped.

According to Subramanium, Amazon had invested `1,431 crore in FCPL and this was recorded in the share subscription agreement (SSA) of August 22, 2019 entered amongst Amazon, FCPL and the Biyanis. “The core understanding underlying Amazon’s investment was that FRL’s retail assets would continue to vest in FRL. Two distinct rights, in particular, were granted to Amazon – FRL could not transfer its retail assets without FCPL’s consent, which could not be given unless Amazon provided its consent. Besides, FRL was prohibited from transferring or selling its retail assets to “restricted persons,” including Mukesh Ambani (Reliance Industries) Group, which is a ‘restricted person’ under the FCPL shareholders’ agreement (SHA) and FRL SHA.

The hearing in the matter will continue on Thursday.

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