OPEN APP
Home / Companies / Delhi HC stays  arbitration against  Future  Group
Listen to this article

MUMBAI : The Delhi high court on Wednesday stayed arbitration proceedings initiated by Amazon.com Inc. in Singapore against estranged partner Future Group for violating contracts, offering a breather to the debt-laden Indian retailer.

A division bench of chief justice D.N. Patel and justice Jyoti Singh said not staying the proceedings at the Singapore International Arbitration Centre (SIAC) will cause irreparable damage to the Future Group. The division bench also stayed Tuesday’s single-judge order of the same court that dismissed Future Group’s petition for quashing of arbitration proceedings.

“Much has been argued by both sides, including on maintainability. We will deal with all these issues on the returnable date. Meanwhile, we stay the proceedings of the arbitral tribunal till the next date of hearing. We also stay the order of the single judge," the bench said in an oral order.

The high court will now hear Future Group’s plea on 1 February.

During the hearing on Wednesday, Mukul Rohatgi, the senior counsel representing Future Group, said that the single judge did not appreciate the importance of the competition regulator’s order.

Last month, the Competition Commission of India (CCI) suspended its approval of Amazon’s 2019 deal with Future Group, a key pillar on which the US e-commerce giant’s attempt to block the sale of Future Group’s assets to Reliance Industries Ltd rests. Amazon has cited the contractual obligations of the investment deal in Future Coupons Pvt. Ltd to prevent Reliance Industries from taking over Future Group’s assets. CCI claimed Amazon suppressed information while seeking regulatory approval for buying a stake in Future Coupons and imposed a 202 crore fine.

Wednesday’s court order made no mention of the CCI order against Amazon or the heavy hand with which they came down on the company, Rohtagi said.

Arguing the matter, Gopal Subramanium, a senior lawyer representing Amazon, said the tribunal has not put Future Group’s termination application on the back burner. The case before the single-judge bench of Amit Bansal was on whether the termination application should be prioritized, Subramanium added.

“The 2019 approval given by the CCI is not revoked. It has been kept in abeyance. There is no effacement at all of that approval," Subramanium said.

He also informed the court that Amazon plans to challenge the CCI order in the National Company Law Appellate Tribunal.

Ankita Singh, a partner at A&P Partners, said although the stay is operational only till the next date of hearing, it defeats the crux of a contractual arrangement between parties, an agreement on a resolution method if a dispute arises.

“From a macro view, this will dissuade foreign companies from entering the Indian market," Singh said.

Suvigya Awasthy, associate partner, PSL Advocates & Solicitors, said the division bench has not opined on the merits of the order passed by the single judge and merely granted interim relief. “Amazon has stated that it is pursuing its legal remedies against the CCI order and raised objection to tthe maintainability of an intra-court appeal, which is an arguably tenable legal submission," Awasthy said.

“One may argue that the order ostensibly hints at judicial interference in the arbitral process and militates against the non-interventionist trend of Indian judiciary recently, but one cannot close their eyes to the fate of the arbitration and its futility, considering the merits of the application for termination of arbitral proceedings pending before the tribunal in Singapore," he added.d both the parties will use all the legal options available to them," said Unni.

 

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Close
Recommended For You
×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout