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Amazon, which owns a 5% indirect stake in Future Retail Ltd, claims that its 2019 investment agreement bars Future group from selling its assets to RIL. (Photo: Reuters)
Amazon, which owns a 5% indirect stake in Future Retail Ltd, claims that its 2019 investment agreement bars Future group from selling its assets to RIL. (Photo: Reuters)

Singapore arbitration award valid, legal: Amazon on Future Retail’s plea

  • The Singapore court on 25 October had passed an interim order barring Future Retail from disposing its assets or issuing securities to secure any funding from a restricted party

New Delhi: Amazon on Wednesday said that all parties had agreed to arbitration before the Singapore International Arbitration Centre (SIAC) and the arbitral award is valid and legal. This was in response to a plea by Kishore Biyani-led Future Retail in the Delhi high court claiming that the e-commerce major was interfering in its deal with Reliance Retail on the basis of an interim order by a Singapore arbitrator.

The Singapore court on 25 October had passed an interim order barring Future Retail from disposing its assets or issuing securities to secure any funding from a restricted party.

Subsequently, Amazon had written to Securities and Exchange Board of India (Sebi), stock exchanges and Competition Commission of India (CCI), urging them to take into consideration the Singapore arbitrator's interim decision as it is a binding order, Future Retail had told the high court.

The Kishore Biyani company has contended that the award was not binding and is persuasive in nature.

The court will hear arguments by Future Retail on Thursday while Amazon concluded its submissions today.

Amazon’s counsel senior advocate Gopal Subramanium explained in detail about the validity of the arbitral award passed by the SIAC while saying Future Retail's (FRL) petition isn’t maintainable.

"After finding a prima facie case, he passed the directions. The arbitrator found no violation of FDI rules. Even without emergency award, my client could go to the statutory authorities. Why was there the need of emergency award? We wanted to go by the letter of the arbitration agreement. To call something nullity, there’s some illegality. But here notice is given to the other party. They agreed to the proceedings," He said.

Subramanium referred to Delhi International Arbitration Centre, Mumbai International Arbitration Centre Rules and the Madras International Arbitration Centre Rules and said that they have provisions for emergency relief.

"...Merely because it is not for your advantage then it becomes illegal. It seeks everything in contradiction of the award. In the award the arbitrator has considered the award right up to end of August 2020. FRL was aware that Amazon's consent was needed in case of sale or retail assets particularly to a restricted person," he added.

Senior advocate Harish Salve, appearing for Future Retail, had objected to Amazon’s communication with regulatory bodies.

"Emergency arbitrator’s award is persuasive and it is not binding. They are writing to CCI and Sebi that the award is binding. I'm pressing for an ad interim injunction against Amazon to stop them from writing to statutory bodies...They are interfering with a lawful transaction. They want FRL to be in breach of contract with RIL. They can’t come and stop my transaction with Reliance...," Salve said.

Senior advocates Mukul Rohatgi and Abhishek Manu Singhvi made their arguments for the promotors and Reliance Industries, respectively.

"...The list of restricted person is set out. It is common to FRL and FCPL agreement. Parties agreed to undertake arbitration as per SIAC rules," Subramanium submitted before the court.

"Would they have said the same if the order was in their favour? One of the SIAC rules is that when the arbitrator makes an award you cannot take recourse. It is only an interim measure till the time the establishment of arbitrator tribunal is completed. An emergency award is permanent to the extent of 90 days. Parties have agreed consciously. If there is a prima facie conclusion by the emergency Arbitrator, parties are bound," he added.

The dispute relates to Future group’s sale of its retail, wholesale and warehousing assets to Mukesh Ambani’s Reliance Industries for 24,713 crore. Amazon, which owns a 5% indirect stake in Future Retail Ltd, has contested the sale in the Singapore court, claiming that its 2019 investment agreement bars Future group from selling its assets to RIL.

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