Delhi High Court reserves order on Future group plea to end arbitration with Amazon
Delhi High Court reserves order on Future group plea to end arbitration with Amazon
The Delhi High Court on January 3 reserved its order on Future group’s plea seeking termination of the ongoing arbitration proceedings with e-retailer Amazon in the wake of an anti-trust order passed in December 2021. The court will pronounce its order on Future group’s plea at 4.30 PM on January 4, it said.
Considering the arbitration tribunal tasked to decide the dispute between two entities is scheduled to meet on January 5, Future group cited the urgency in its plea and urged the Delhi High Court to hear the case today itself. As such, a single-judge bench of Justice Amit Bansal took up the case for hearing on late-Monday afternoon and reserved its orders after concluding the hearing that lasted nearly three hours.
Kishore Biyani’s Future group approached the Delhi high Court seeking termination of ongoing arbitration proceedings with Amazon in the wake of Competition Commission of India suspending its approval for the 2019 deal between the two entities.
CCI order, Arbitration law, and what Future group and Amazon argued:
The request for such termination was made by Future group before the Singapore tribunal that is hearing the case but the request was not accommodated by the tribunal which then brought Future group before the Delhi High Court, senior advocate Mukul Rohatgi representing Future Coupons Pvt Ltd said while explaining the timeline to the high court.
According to Rohatgi, the tribunal, citing its busy schedule, agreed to accommodate Future group’s plea for termination of proceedings after carrying out the main hearing in the case between January 5 and 7 on the issue of damages to be ascertained. “It will be completely illegal, completely in defiance of Indian law and in defiance of CCI procedure,” Rohatgi said referring to tribunal’s decision to proceed with main arbitration proceedings.
Now, before the Delhi High Court, it is Future group’s case that with the CCI approval for the 2019 deal suspended, the investment deal is rendered invalid and the arbitration proceedings arising from the same cannot stand. Rohatgi termed the arbitration proceedings “futile” and “irrelevant” in light of the CCI order.It is important to note, however, that the CCI has kept the approval for the deal in abeyance and has not quashed it yet. CCI noted that Amazon had hidden important strategic information while seeking approval for its investment in Future Retail’s promoter firm Future Coupons Pvt Ltd. Amazon, which denies any wrong-doing, has also been granted time by CCI to put forth its case and make fresh application for approval following which the commission will reconsider the approval for the deal.The tribunal set up by the Singapore International Arbitration Centre was reportedly told by Amazon that the company has legal remedies available against the CCI order.
While arguing before the high court, senior advocate Gopal Subramanium representing Amazon highlighted that the position in law outlines that arbitration clauses and agreements are independent of the main contracts and would not perish simply because a regulatory approval has been suspended.
Subramanium also defended the tribunal to say that the tribunal did not reject Future group’s plea to hear termination application altogether but agreed to accommodate hearing on the application after the scheduled hearings. “Any attempt to paint a different picture would be less than fair,” Subramanium said countering Rohatgi’s arguments. The senior counsel added that the schedule for hearing on main case was fixed in November 2021.
“The essence of Arbitration and Conciliation Act is to ensure expeditious adjudication, and the tribunal is cognizant of this,” Subramanium added.
The asset sale deal between India’s two leading retailers was stayed by an emergency arbitrator in October 2020 and the validity of this order was finally affirmed by the Supreme Court in August 2021. While this merger remains stayed, Future group firm moved CCI accusing Amazon of withholding pertinent information leading to the CCI order of December which has now become basis for a fresh round of litigation.