The Supreme Court on Thursday reserved judgment on e-commerce giant Amazon’s plea against the merger of Future Retail Ltd (FRL) with Reliance Retail and will decide whether the Singapore-based emergency arbitrator(s) to stay the Rs 24,731 crore deal. EA) whether the award was valid under Indian law and may be enforceable.
Amazon.com NV Investment Holdings LLC and FRL are embroiled in a bitter legal battle over the deal and the US-based firm has demanded in the top court that the EA award was valid and enforceable.
So now we close the matter. The judgment has been reserved, a bench of Justices RF Nariman and BR Gavai said after senior advocates Harish Salve and Gopal Subramaniam, appearing for FRL and Amazon respectively, concluded their submissions in the matter.
The top court, which had earlier asked the National Company Law Tribunal (NCLT) not to pass final orders relating to regulatory approvals for FRL-RRL amalgamation, began hearing the final arguments on July 20.
We will decide whether the EA award is covered under Section 17(1) of the Arbitration and Conciliation Act (which deals with interim award by an arbitral tribunal). And if so, whether it can be invoked under section 17(2) (of the Act), the bench said.
The provisions of the Act deal with interim measures ordered by an arbitral tribunal and section 17(1) states: Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, grant to a party any interim remedy. can order. protection as the arbitral tribunal may consider necessary in relation to the subject matter of the dispute.
Section 17(2) provides that the arbitral tribunal may require a party to grant reasonable protection in respect of an interim measure ordered.
Salve, appearing for FRL, referred to the judgments on the legality and enforceability of arbitration awards and said that the EA had no presumption under Indian law on arbitration and conciliation and in any case, there was no arbitration agreement to that effect. .
There was no provision for an EA under Indian law and it cannot be done through the process of creation, Salve said, referring to a single-judge order of the Delhi High Court, which held the award of EA as valid.
Amazon told the bench that Biyani of Future Group had negotiated with it to enter into certain agreements and that EA is bound by the award which prevents FRL from going ahead with the Reliance Retail merger.
Subramaniam reiterated in his submission that EA’s award in favor of Amazon was valid and enforceable under the Arbitration and Conciliation Act of India.
For the purposes of this Act, an arbitral tribunal shall mean not only a three-member tribunal, but shall also include an EA. And only because the word ’emergency’ is not there (in the Act), does he cease to be an arbitrator under the Act, he said, adding that the court here has to enforce the award as per the provisions of the law.
Advanced rejoinder submissions for a few minutes Salve said and said that FRL is saying that EA has no jurisdiction to pass any award and Delhi High Court cannot make it enforceable by making Indian law.
Several authorities (judgments) have been cited. Will it be convenient by tomorrow morning if we bring on record a brief note for reply to the officers cited in the reply, they told the bench allowing the request.
Kishor Biyani and 15 others, including FRL and Future Coupons Pvt Ltd (FCPL), have been made parties in a batch of petitions by Amazon challenging the Delhi High Court order of the bench that paved the way for the deal.
Amazon had moved the top court against the Delhi High Court’s division bench order, which had paved the way for the Reliance-FRL deal.
On February 8, the division bench had stayed the single-judge direction to the FRL and various statutory authorities to maintain status quo on the mega deal.
The interim direction was passed on an appeal by the FRL challenging the February 2 order of the single judge, which had ruled in favor of the US firm that EA’s award was valid and enforceable.
Amazon had first filed a petition before the High Court (single judge) on October 25, 2020 to enforce the EA award by the Singapore International Arbitration Center (SIAC) to restrain FRL from pursuing the deal with Reliance Retail. Had given.
The High Court bench, however, said it was staying the single-judge order as FRL was not a party to the Share Membership Agreement (SSA) between Amazon and FCPL and the US firm was a party to the FRL-Reliance deal. was not.
FRL, in its appeal, had claimed that it would be a complete disaster if the February 2 order was not stayed as the proceedings before the NCLT for approving the amalgamation plan have been stayed.
It had argued that the status quo order of the single judge would effectively derail the entire scheme which has been approved by the statutory authorities in accordance with the law.
In August last year, Future Group had entered into an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance.
Subsequently, Amazon took FRL to EA before SIAC over alleged breach of contract by Future Group.
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