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MUMBAI : The Delhi high court on Tuesday dismissed petitions filed by Future Coupons Ltd and Future Retail Ltd, seeking the quashing of the arbitration proceedings initiated by Amazon.com Inc. in Singapore, dealing a blow to the debt-ridden Future Group’s efforts to sell its assets to Reliance Industries Ltd.

Denying the requests of the Future Group companies, Justice Amit Bansal, in his 21-page order, said that “there is nothing to suggest that the arbitral tribunal denied the parties equal opportunity or that the tribunal has not been accommodating Future Group firms’ pleas".

The ruling clears the way for the Singapore International Arbitration Centre (SIAC) to continue as the adjudicating authority for the dispute. SIAC is set to begin hearing the case on Wednesday.

Till 7 January, the tribunal will hear expert witnesses on Amazon’s arbitration plea, which seeks to block the sale of Future Group’s assets to a unit of billionaire Mukesh Ambani’s Reliance Industries Ltd. Amazon contends that its 2019 investment agreement with Future Coupons bars Future Group from entering into a transaction with specified entities, including Reliance Industries.

On 8 January, SIAC will hear Future Group’s pleadings. The Kishore Biyani-led company wants to terminate the arbitration proceedings as the Competition Commission of India (CCI) has revoked its approval of the 2019 deal between Amazon and Future Coupons.

The high court’s latest order follows a termination application filed by Future Group before the court seeking that the arbitration proceedings initiated by Amazon in SIAC should be set aside. In the plea, Future Group stated that SIAC should have first heard the group’s arguments on quashing the proceedings instead of hearing expert witnesses.

On Monday, the Delhi high court heard the matter and reserved its order. Future Retail shares rose 3.6% to close at 51.80 on NSE ahead of the verdict.

In the order, Justice Bansal added that a mere imposition of strict deadlines or the arbitral tribunal’s refusal of requests for adjournment, or the order in which the arbitral tribunal evaluates the parties’ petitions, cannot be used to argue that the tribunal’s orders are “perverse" or “lack inherent jurisdiction".

On Monday, Mukul Rohatgi, a senior counsel for Future Coupons, asked the high court to compel the tribunal to quash proceedings, terming them “futile" and “irrelevant".

This latest litigation stems from an order by the Indian competition watchdog passed on 17 December, where it suspended its approval on Future Coupon’s 2019 deal with Amazon, pending submission of fresh documents by 17 February.

CCI also imposed a penalty of 202 crore on Amazon for “misrepresenting and suppressing" key details when it sought approval in 2019.

The Future Group had then approached the Singapore tribunal on 23 December, asking it to terminate the arbitration proceedings between Amazon and itself.

SIAC stated that it would hear Future Coupons’ termination application after hearing the entire matter on 8 January.

The tribunal said that it would consider Future Coupons’ concerns while deciding on the matter.

Sameer Jain, managing partner, PSL Advocates and Solicitors, said that while the antitrust regulator has withdrawn its approval, the order has not attained finality, and Amazon has remedies against it.

“The application has been rightly rejected and reflects the existing position of the law. It is settled that an arbitration agreement is separable from the main agreement and thus can be independently enforced. Whether the substance of the agreement violates the law, that is for the tribunal to determine," Jain said.

Manmeet Singh, a partner at Mohit Saraf and Partners, said that the court declined to interfere in the tribunal’s decisions since the dates for hearing the expert witnesses and termination were already set.

“SIAC is the competent adjudicating authority to decide on whether the arbitration should be carried on or be terminated," Singh said.

A favourable verdict from the SIAC is crucial for Future Group as its flagship company Future Retail has already defaulted on 3,495 crore worth of dues payable by 31 December, and its debt instruments were downgraded to default. Future owes banks 6,278 crore.

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